Social Security Administration (SSA) representatives routinely dispense inappropriate advice and/or incorrect information to people like you and me. In the course of consulting with hundreds of couples and individuals, I have become personally aware of dozens of such instances. Sometimes the clients have come to me for a second opinion following an experience with SSA. Sometimes they report back after I have helped them make informed decisions about their benefit claiming. In either case, it’s a risky proposition to rely solely on advice or information received from SSA, either over the phone or in person at a local office.

Training and competence. SSA employees are primarily charged with processing applications for benefits. They are supposed to be trained to know, or be able to research, the rules that pertain to benefit claiming; to understand and explain how those rules operate in your particular situation; and to follow prescribed procedures to translate your application into benefits. As in most bureaucracies, not all representatives are equally well trained and knowledgeable. SSA reps run the gamut from highly trained, excellent public servants to inexperienced or incompetent functionaries – and everything in between. The problem is that it’s hard to assess the competency of the representative you are dealing with.

A very personal decision. Even the best SSA representatives are not trained to be claiming strategists, nor do they know enough about your particular circumstances to be able to give you reliable advice about which approach would be best for your situation. Heck, I am a very knowledgeable claiming strategist, and I don’t tell clients what they should do. I show them a range of strategies and encourage them to make claiming decisions that fit well with the rest of their financial situation.

True Story: I worked with a couple last February to help them figure out their Social Security claiming situation.  John and Joan own a small business.  They settled on a strategy that called for John to file and suspend before the end of April 2016, and for Joan to file a restricted application for spousal benefits when she turned 66 eight months later.

In mid-November I received the following email message from John:

“I just wanted to follow up with you since we last spoke. I did file and suspend last April, and Joan went into our local SSA office today to file a restricted application for spousal benefits. The representative at the window tried to talk her out of it! She wanted Joan to file for benefits under her own account since she’s turning 66 next month.  Joan had your analysis with her and kept insisting that the clerk should proceed with the restricted application. The clerk kept saying: ‘Well, that may be what YOUR HUSBAND wants you to do, but what do YOU want to do? Don’t you realize that you could be getting twice as much by filing for your own benefits?’

What is the matter with these people?  Joan finally had to tell her to just do what she was being told to do, and the rep relented, so it seems to have turned out OK: Joan will get half of my PIA for the next four years, while our own Social Security benefits will each continue to grow at 8% per year.”

True Story #2.  I completed an analysis for Mike and Joanne back in March 2016. Mike was already 67 years old, while Joanne would turn 66 in October. They decided that Mike would claim his benefits in October to coincide with Joanne’s turning 66, when she would claim spousal benefits.

Around the middle of September he completed an application for his benefits online. However, the next day he got a call from an SSA representative who had read his application. The rep recommended that Mike should file for his benefits retroactive to March, pointing out that if he did that he would receive a lump-sum check for $18,000.

The $18,000 lump sum seemed attractive to Mike, so he contacted me immediately with two questions. He wanted to know (1) why he shouldn’t do the retroactive application, and (2) why I hadn’t notified him of this opportunity.

I told Mike that filing retroactively would cost him about $108 per month for the rest of his life as well as Joanne’s life. If getting $18,000 into his pocket by September had been important to them when I consulted with them back in March, Mike could have claimed his benefits at that time. But an extra $18,000 in early benefits was not important to them, and claiming his benefits in March would have been inconsistent with everything they had told me about their goals and priorities. Mike thanked me for “screwing my head back on straight” and the next day politely told the rep that he was going to follow through with the application as filed. The rep was incredulous and made one more attempt to convince Mike of the stupidity of his decision, but Mike stood his ground.

Have a plan and stick to it. If you don’t know what you’re doing and why you’re doing it when you seek help from SSA or file an application, you risk being talked into losing out on thousands of potential benefit dollars. What’s more, if the representative you deal with seems knowledgeable and acts in a friendly manner you may not know when you are being misled. In fact, you may even thank them profusely and tell your friends how helpful those folks at SSA really are! If you have a well thought out plan, great! Execute your plan and don’t get derailed. If you don’t, fill out this questionnaire and get started.

Many SSA representatives appear to believe that they are only doing a good job if they can (1) turn an inquiry into an application, and/or (2) persuade an applicant to adopt a strategy that will maximize their benefits on that day, regardless of the long-term consequences.

The moral of these stories: taking advice from Social Security representatives may be hazardous to your wealth!

Peter M. Weinbaum, JD