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Social Security Survivor Benefits: More Bad Advice from SSA

Over the past year I find myself increasingly being asked to assist in damage control. In many of those situations the damage has been inflicted by the Social Security Administration itself.

Case in point: having just read the May 31 SSA blog post entitled The Importance of Social Security Survivors Benefits http://blog.socialsecurity.gov/the-importance-of-social-security-survivors-benefits/, I sensed my blood pressure beginning to rise. Two different items set me off, one simply misleading and the other downright dangerous.

The misleading statement reads as follows: “The amount of benefits your family receives depends on your lifetime earnings. The higher your earnings are, the higher the benefits will be.” Obviously there is some truth to the foregoing statement, but it is misleading in at least two respects.

  1. If the worker died after claiming his or her benefits before Full Retirement Age, then his or her surviving spouse could receive significantly less than the surviving spouse of a lower earner. Survivor benefits are most often equal to the retirement benefits the worker was receiving at the time of death.

Example: Worker A had a Primary Insurance Amount (PIA) of $2,000. He died at age 71, having delayed claiming his benefits until age 70. His widow was potentially eligible for survivor benefits of $2,640.

Worker B had a PIA of $2,600. He died at age 71, having claimed his benefits at age 63. His widow was potentially eligible for survivor benefits of $2,145.

  1. The deceased worker’s earnings and date of claiming determine the maximum possible survivor benefits. However, the age at which the surviving spouse claims survivor benefits determines what percentage of the maximum possible benefit amount will actually be payable.

Example (continuing): Worker A’s spouse claimed survivor benefits at Full Retirement Age (66 in this case) and became entitled to receive $2,640 per month. Worker B’s spouse claimed survivor benefits at age 60 and receives $1,859 per month.

The dangerous statement reads this way:

When a worker dies, we recommend that their survivors apply for benefits right away. You can apply by telephone or at any Social Security office. For more information about survivors benefits, visit www.socialsecurity.gov/survivors. If you think you qualify, please don’t wait. Apply today.”

Worker B’s surviving spouse did exactly what the SSA blog suggests. She applied for survivor benefits when she turned 60, which is the earliest age of eligibility. As a result, she received a benefit of $1,859, which amounts to 71.5% of Worker B’s PIA, the minimum possible based on a PIA of $2,600.

Worker A’s surviving spouse ignored the SSA advice and waited until she reached Full Retirement Age to claim survivor benefits of $2,640, thus receiving 100% of the maximum possible, based on a PIA of $2,000.

The bottom line: many factors can come into play when a person becomes eligible for survivor benefits. It is not always a foregone conclusion that one should apply for benefits right away.”

The Coup de Gräce

Charlie was 67 in 2014 when he filed and suspended (a technique that is no longer available) to enable his wife, then 66, to claim spousal benefits on his record. His wife collected spousal benefits for about a year, and then died unexpectedly.

Shortly after his wife passed, Charlie contacted SSA to see if he would be eligible for survivor benefits on her record. The response was positive, so Charlie filed the application and began collecting survivor benefits of $2,373 per month while he waited to begin receiving his own higher benefits at age 70.

The monthly payments continued for a total of 11 months, then stopped abruptly in 2016. Shortly thereafter Charlie received a letter from SSA saying that they had made a mistake in approving his claim for survivor benefits and directing Charlie to immediately repay the $26,103 he had received due to their error.

Charlie doesn’t have that amount of cash readily available, and so he is now trying to negotiate a payment plan with SSA. He is also working with his tax preparer to amend his 2015 and 2016 federal income tax returns so that he can get a refund of the income taxes he paid on the survivor benefits he now must return.

Charlie called me in the spring of 2017 to find out if I would help him appeal the decision. If he had called me before he filed for survivor benefits, I could have saved him a lot of trouble. However, by the time he contacted me there was nothing I could do but empathize, and then explain why he has no grounds to dispute the SSA’s latest decision. So much for the advice to “apply for benefits right away.”

Peter M. Weinbaum, JD

Suze Orman’s Lame Social Security Advice

Over the past few years, the Social Security Administration (SSA) seems to have dramatically expanded its marketing budget. SSA is constantly putting out blog posts and other communications, primarily focused on enhancing its brand and trying to persuade us that it cares deeply about the members of the public it exists to serve.

The April 13, 2017, post was entitled What Every Woman Should Know About Social Security, written by “Suze Orman, Personal Finance Expert.” http://blog.socialsecurity.gov/suze-orman-what-every-woman-should-know-about-social-security/  Following is a verbatim quote from Ms. Orman’s article:

 “Here’s what women need to understand about Social Security.

  1. You can claim a benefit based on your own work history, or on your spouse’s Social Security earnings record, if you are married for at least ten years.
  2. You are eligible for Social Security if you have worked (and paid into the system) for 40 quarters, which is 10 years.
  3. Your benefit is based on the highest 35 years of earnings. That’s where working through your 60s might be helpful, if it knocks out some of your lower-income years from your benefit computation.
  4. When your spouse dies, you won’t be allowed to keep collecting his/her benefit and you are entitled to just one benefit. But you will be able to claim the higher of the two benefits.
  5. If you were married at least 10 years before you divorce, you will be eligible to claim a benefit based on your ex’s Social Security record.”

What, you may ask, is so dangerous about that? The answer: taking it at face value and relying on it in your planning. Here are some observations and comments relating to her numbered paragraphs:

  1. You do not have to be married for 10 years to potentially be eligible to claim benefits on your spouse’s Social Security record. You are required to have been married for only one year. However, whether you have been married for 10 years or one year at the time you claim, there are a number of additional hurdles you must be able to clear in order to be eligible to collect spousal benefits.
  2. While it is true that you must have accumulated 40 credits of covered earnings to be eligible for benefits on your own record, you may still be eligible for benefits on the record of a spouse (or former spouse) even if you have never worked. In 2017, it takes earnings of $1,300 to generate one credit; and although the maximum number of credits you can earn in any given calendar year is fouryou could theoretically earn enough ($5,200) in one quarter (or even in one day) to accumulate 4 credits. So you don’t actually have to have worked in 40 separate quarters to be eligible for benefits on your own record, although you must have earned credits over a minimum of 10 different years.
  3. It is essentially true that your benefits are based on your highest 35 years of earnings, but keep in mind that we are talking about inflation-adjusted However, the potential to increase your benefits by continuing to work is not limited to your 60s. For example, if your earnings during the year you turn 83 become part of your highest 35 years, your benefits will increase.
  4. It is true that you cannot receive spousal benefits after your spouse has died, because spousal benefits are available only during your spouse’s lifetime. Moreover you cannot collect your own benefits plus survivor benefits at the same time. However, there are circumstances under which it makes sense to claim benefits on your own record until you reach Full Retirement Age, and then switch to survivor benefits. In other situations, you might claim survivor benefits first and later switch to benefits on your own record.
  5. Yes, you must have been married for at least 10 years to have the possibility of claiming benefits on your divorced spouse’s record. However, there are many circumstances under which you will not be eligible to receive divorced spouse’s benefits despite having been married to your former spouse for at least 10 years.

By the way, to the extent that any of the above is applicable to women, it also applies to men.

I suspect that Ms. Orman was well compensated for bringing her name-recognition and celebrity status to the SSA’s online blog. However those who rely on these kinds of sound-bite articles do so at their peril.

Peter M. Weinbaum, J.D.

Social Security COLA for 2017 is VERY Small

On October 18 the Social Security Administration announced a Cost of Living Adjustment (COLA) of 0.3% for 2017.  Aside from the three years in which there was no COLA (2010, 2011, and 2016), this is by far the smallest percentage COLA since these automatic increases were first introduced in 1975. 

How does this translate into extra dollars? It amounts to a $3 monthly increase for every $1,000 of monthly benefits. So if you’re receiving a monthly benefit amount of $2,000, you would expect a gross benefit increase of $6.  The COLA takes effect beginning with December 2016 benefits, which are payable in January 2017.

But don’t spend it all in one place: if you are paying Medicare Part B premiums it is quite likely that the entire COLA increase, and possibly more, will be consumed by higher Part B premiums. We will know more when Medicare releases its premium schedules for 2017.

The real impact of this miniscule COLA will be felt in other areas that, while not affected by the size of the COLA percentage increase, depend on the declaration of a COLA of any size to trigger a change.  Here are some of the affected numbers:

Social Security Contribution and Benefit Base.  Also known as the “taxable wage base,” the ceiling on earnings subject to Social Security taxes grew to $118,500 in 2015, and remained at that level in 2016 because there was no COLA in 2016, and the wage base cannot increase unless there is a COLA declared for a particular year.

The 0.3% COLA for 2017 has allowed the wage base to spike upward, based on a formula that tracks the National Average Wage Index.  In 2017 that ceiling has been raised to $127,200 – the largest year-over-year dollar increase in the history of Social Security.  Translation: if your earnings as an employee are at or above the new wage base you will pay $539 more in Social Security taxes than you would have paid in 2016 with identical earnings.

Social Security Earnings Test.  In 2016, the “exempt amount” under the Earnings Test was $15,720; in 2017 the exemption increases to $16,920.

Credits or Quarters of Coverage.  40 credits are needed to qualify to receive retirement benefits under one’s own record.  In 2016, a credit required earnings of $1,260; in 2017, $1,300 of earnings is required to accumulate a credit.

Maximum Primary Insurance Amount.  The highest possible benefit for a person retiring in 2016 at Full Retirement Age was $2,639, which was down from $2,663 the previous year.  The maximum benefit for someone retiring at FRA in 2017 is $2,687.

Peter M. Weinbaum, JD


Now That File and Suspend is Gone, What is Left?

With all the media attention centered on the demise of file and suspend, you might have gotten the idea that it no longer matters what you do regarding Social Security claiming decisions.  Not true!  File and suspend was utilized by a surprisingly narrow range of Social Security claimants, sometimes inappropriately and to a couple’s detriment.  However, it was a very “cool” technique that often made me look like a genius, so I regret that it no longer has a place in the claiming toolkit.  That being said, the particular claiming strategy that you and your spouse choose can still make a substantial difference in the benefit dollars you will collect.  read more

Budget Bill Changes Social Security Claiming Landscape

Shortly after 12:00 noon on Monday, November 2, 2015, the President signed the two-year budget bill into law.  The bill contained some amendments to the Social Security Act that will curtail some claiming strategies that have been both useful to and popular among individuals and couples across the socioeconomic landscape.

How the Rules Were Changed

The changes focus on two areas:

  1. Deemed filing rules, including the restricted application for spousal benefits only
  2. Voluntary suspension rules, including the file and suspend technique

The current deemed filing rules provide that if you apply for any retirement benefit before reaching Full Retirement Age (FRA), you are deemed to be applying for all retirement benefits for which you are eligible.  This means that if you file for your own retirement benefit and are also eligible for a spousal retirement benefit, or vice versa, you will be treated as though you applied for both.  In other words, you cannot restrict your application to one or the other.

However, once you reached FRA, you could file an application restricted to spousal benefits only, which would allow you to receive some spousal benefits while your own benefits were growing at 8% per year.

The new law extends the deemed filing rule to age 70, thus eliminating the ability to collect spousal benefits while allowing your own benefits to grow.

The current voluntary suspension rules allow you to suspend your benefits after you reach FRA.  This includes situations where you might file an application for your benefits and then immediately suspend payments.

Why would anyone want to do this?  Because Social Security rules have long provided that no one can claim benefits on your record (while you are alive) until you have filed an application for benefits on your own record.  For the past 15 years, the rules have permitted other family members – such as your spouse, dependent minor child, disabled adult child, or dependent parent – to receive benefits on your record even though you had suspended payments.

The new law provides that when you suspend your benefits, no one may claim benefits on your record until you begin or resume receiving payments.  A person who has filed for his or her own benefits can still suspend after Full Retirement Age, but only for the purpose of increasing their benefits.

Effective Dates and Opportunities

Although most of the advantages of file and suspend will no longer be available once the law takes full effect, and the ability to file a restricted application for spousal benefits only will also be lost for many, there are some silver linings to be found within the grandfather provisions of the new law:

Deemed Filing/Restricted Application for Spousal Benefits Only:

  1. Spouses (and divorced spouses) who were born on or before January 1, 1954, will be exempt from the new rules governing deemed filing and restricted application.
  2. If you qualify for grandfathering, as just described, you will be eligible to file a restricted application between ages 66 and 70, provided that (a) your spouse has filed for his or her own benefits; and (b) if your spouse has suspended benefits, he or she has done so within the period described in the section below. [Note: if you are otherwise eligible for divorced spouse benefits, it does not matter whether or not your ex has filed or if his or her benefits are in suspension, as long as your ex is at least 62.]
  3. If under the grandfather, you file for your own benefits before 66 and your spouse subsequently files for his or her own benefits, you will not be deemed to have filed for spousal benefits.

Voluntary Suspension of Benefits:

  1. The new provisions regarding voluntary suspension of benefits will not apply to you if you have filed for your benefits and requested suspension before April 30, 2016.
  2. To take advantage of this opportunity, you would need to have been born on or before May 1, 1950.
  3. If you are successful in suspending your benefits before the effective date of the new rules, then the following people may be eligible to claim on your record while your benefits are under suspension:
    1. Your spouse who attained age 62 on or before January 1, 2016
    2. Your spouse who cares for your minor or disabled adult child
    3. Your minor or disabled adult child
    4. Your dependent parent

Recommended Action Steps:

  1. If you or your spouse were born on or before May 1, 1950, have an analysis done by a professional to determine whether or not it is to your advantage to suspend during the 180-day window that closes on April 30, 2016.
  • File and suspend can have negative consequences for a couple’s overall benefit situation; don’t do it without good reason.
  • Even if file and suspend produces positive results for a couple, there may be superior options available.
  1. If you or your spouse were born on or before January 1, 1954, have an analysis done by a professional to determine whether and under what circumstances it would be to your advantage to file a restricted application. Remember that the deemed filing rules under the old law continue to apply before you turn 66.
  1. If neither you nor your spouse is eligible for grandfathering based on your dates of birth, opportunities for creative benefit claiming may not be quite as plentiful as they were before these changes. However, the gap between the claiming strategy that fits you best and one that fits you least well could still amount to many, many thousands of dollars.  Have an analysis done by a professional to see the full spectrum of claiming strategies that could work best for you.

Social Security Consulting Services

There may be literally hundreds of Social Security claiming options available to couples, as well as to individuals who have been widowed or divorced.  Typically, three to six options will emerge as representing the most promising choices in relation to your priorities and your particular situation.  The heart of my Social Security consulting practice is to perform an analysis of your most promising Social Security options and present them in a comprehensive, handcrafted written report, which you are encouraged to share with your financial advisor.  I also consult with financial services professionals and CPAs regarding their clients’ situations.

It is my opinion that Social Security claiming decisions should not be made in a vacuum.  Social Security is simply one piece – often a very important piece – of your overall retirement planning puzzle, and I encourage you to work closely with your financial advisor to put all the pieces together.

Process.  You fill out an e-form questionnaire and upload PDF copies of your most recent Social Security statements for you and your spouse. Or you may download a PDF version of the questionnaire then scan and email it to me along with PDF copies of the statements.   After I have had a chance to review that information, we might have a brief telephone conversation to make certain I understand your priorities and preferences for your Social Security benefits.  If you think you could benefit from my Social Security consulting services, I will quote you a fee and you can decide whether that works for you. Please click here for a description of available consulting options and associated fees.



Social Security Seminars

In the course of a year, I present more than a dozen Social Security seminars to audiences such as the following:

  • Public groups
  • Private client groups
  • CPAs, attorneys, and financial services professionals
  • Employee groups

Most seminars run for 1.5 – 2 hours, although the length can be adjusted to meet the needs of the seminar sponsor. The vast majority of my Social Security seminars are presented in person to live audiences, but I have used the webinar format as well. These are not canned presentations: all seminars are hand-crafted by me and tailored to fit the particular audience. Fees vary with the context, the location, and the nature and size of the group.

Through a process that included a thought-provoking questionnaire, a comprehensive report, and a follow up telephone conversation, my wife and I have chosen a course of action in regards to Social Security planning that should net us $70,000 more than we had originally planned for before seeking your advice.

However, your service was much more than just equations and mathematics.  It included a comprehensive report to support your numbers, and the times we spoke were just as informative as the report itself.   The conversations revealed a deeper thought process and reasoning that is most difficult to put into words.  You never told us what to do, but rather gave us life choices to make under several different suppositions.

Thank you again on behalf of my wife and me.


David Winkler

Software Sales Executive, Weston, Florida

How Many Thousands of Dollars of Social Security Benefits Will YOU Leave on the Table?

What if you discovered that what you don’t know about Social Security could result in your walking away from potentially thousands of dollars of additional income?  It happens to others, literally every day.

One recent study[1] reports that anywhere from 46% to 59% of those who became eligible during the last two decades claimed Social Security retirement benefits as soon as they reached age 62.   But filing too early is not the only way you can leave money on the table.

Many people view the claiming decision as a simple one: should I take it now or should I wait?  If I delay claiming benefits, how long would I have to live before I would “break even” compared to claiming earlier?  Very often the decision only seems simple because an individual or couple is unaware of multiple options, many of which are not common knowledge, that may be available to them.

In fact, the Social Security retirement system is NOT simple.  Married couples can often employ a variety of claiming strategies to enhance their retirement income; special options may come into play if you were previously widowed or divorced.  However, if you don’t know about these options you cannot make informed decisions that could help you and your spouse avoid losing thousands of dollars of income to which you might otherwise be entitled.

Consider this situation:

When we first began talking about Social Security, Richard was a successful attorney, still active in private practice and earning a very good living.  He was 67, and had already made the decision to delay claiming his benefits until age 70.  His wife Jayne was approaching 62, wanting very much to retire and begin collecting her benefits as soon as possible.  One strategy I showed them, and which they implemented as soon as Jayne reached 62, allowed them to do exactly what they had wanted to do – and it provided them with more than $15,000 of additional income over the first 30 months.  They would have totally missed this opportunity but for a casual conversation that led them to seek my advice.

My work helps real people make informed decisions about their Social Security benefits: married people and divorced people; widows and widowers; spouses who are the same age and spouses who are years apart; people who “don’t need” Social Security and people who depend on it to make ends meet; people who are eligible for the maximum retirement benefits Social Security has to offer, as well as stay-at-home moms and “house spouses” who don’t have enough Social Security “credits” to qualify for benefits on their own work records.

My process is simple: I gather relevant information about you and your spouse, or former spouses; learn a little bit about your financial needs and goals in retirement; and put together a comprehensive analysis illustrating the most promising options available to you.  I then encourage you to share my work with your financial advisor so that your Social Security claiming decisions can be made in the larger context of your overall retirement income and survivorship planning.

[1] Social Security Claiming: Trends and Business Cycle Effects by Owen Haaga and Richard W. Johnson (Published by the Center for Retirement Research at Boston College, April 2012)

Ask the Social Security Maven a Question

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Peter M. Weinbaum, JD

The Social Security Maven

According to Wikipedia, a maven is “a trusted expert in a particular field, who seeks to pass knowledge on to others. The word ‘maven’ means one who understands, based on an accumulation of knowledge.” 

Peter Weinbaum began focusing on Social Security benefits in 2010 and officially launched his Social Security consulting practice in 2012. He regularly provides Social Security consulting to individuals and couples on their benefit options, and presents approximately 20 Social Security seminars and webinars during the course of a year.

For nearly three decades before becoming a Social Security consultant,  Peter led the advanced planning unit at a major mutual life insurance company, consulting with financial services professionals, attorneys, and CPAs in relation to their clients’ estate, business, and PW Portrait December 2014retirement planning arrangements.  During that time, he worked with advisors to some of the wealthiest families in America, while also assisting thousands of working people and small business owners by providing technical back-up to their advisors.

Peter earned his Bachelor of Arts from Harvard University in 1967 and his Juris Doctor from the University of Michigan Law School in 1970.  He was admitted to practice law in Massachusetts (1971) and in New Hampshire (1978). He also holds a Master of Education in counseling from the University of New Hampshire. He has earned the Chartered Life Underwriter and Chartered Financial Consultant designations, and was formerly a Registered Representative and an Investment Advisor Representative through Equity Services, Inc.

Before embarking on his career in the financial services industry he worked at a small Boston law firm, served for four years as Assistant Dean at Vermont Law School, and spent several years in college and university administration.

For over 20 years he has been an active member of the Board of Directors of the Small Business Council of America, which presented him with the Connie Murdoch Award for outstanding service in 2002.

View Peter’s LinkedIn profile.

The Social Security Maven® is a registered trade name of Stillpoint Associates, Ltd.

I can’t thank you adequately for your swift, professional and excellent advice on our rather tricky Social Security question.  Your answer was creative, not obvious, and especially timely. You obviously are the “go to” person for anyone with Social Security issues.  It’s wonderful to speak with someone who knows their stuff – and is creative and super-timely to boot!

I have over thirty years’ experience in financial planning with clients throughout Vermont, and wish I had known of your services many years earlier.  You’d have saved me countless gray hairs, and my clients significant sums of money.  Thank you for providing such a valuable service, and for doing it so beautifully.

Very much obliged to you!

Amy Leavitt

Former CFP and Principal, Leavitt Associates, Quechee, Vermont

For many years I have known Peter as a very accomplished estate planning attorney who has worked on many sophisticated and elaborate strategies to maximize retirement savings and income.  When I heard he was now focusing on Social Security I was intrigued because that seems so simple compared to what he had been doing.

Turns out, it’s just not that simple.  In fact, it’s surprisingly complicated, but Peter is very clear and thorough, and has developed his usual deep insights into the many nuances of the program.  We had him take a look at our situation and he was remarkably helpful in describing several strategies we should consider to optimize our decisions about when and how each of us should take our Social Security benefits.

He customizes his work to your specific circumstances and his insights will help you make the most appropriate decision for your family.  He doesn’t waste any time either so I found the process refreshingly simple yet impactful.

I highly recommend Peter to anyone approaching Social Security retirement age.

Thomas H. MacLeay

Chairman, Board of Directors, National Life Group