Social Security Administration Myths

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Today's podcast will discuss Social Security Administration Myths with your hosts, Marc Kiner and Jim Blair.

• Website: PremierNSSA.com
• Email: mkiner@mypremierplan.com
• Phone: (513) 247-0526

Transcript

Marc Kiner: Hello, everybody. Welcome to this edition of Social Security Talk with your co-host, Marc Kiner, in my spacious studio in Blue Ash Ohio, joined by my co-host, Jim Blair, in his spacious studio in White Oak, which is also a suburb of Cincinnati, Ohio.

Good afternoon, Jim.

Jim Blair: Good afternoon.

Marc: Can't believe 2022 is coming to an end. Can you?

Jim: It's wrapping up, that's for sure.

Marc: Yes. Two days to go and we'll be into 2023. As a reminder, Jim and I own a company called Premier Social Security Consulting, and our company provides a couple of really good services. Number one, Social Security consulting services. When an advisor is meeting with the client and questions come up about Social Security claiming strategies and options, we can provide an analysis for that client.

Also, number two, and this is what Jim and I are really passionate about, we educate advisors across the country increasing their value to clients, and we offer the National Social Security Advisor certificate after a day of very intense training. That scares people, Jim.

Jim: Yes, I know.

Marc: They take an assessment. After they pass the assessment, they earn the NSSA certificate.

Jim, we emphasize a couple of things in our class, don't we?

Jim: We do. We talk about the benefits that are available to people. Advisors need to be proactive, they need to ask the right questions of their clients and make sure their clients are maximizing benefits.  At age 60-62 it is time to start thinking about Social Security, doesn't mean it is time to file. You must ask those important questions so that you can make sure the individual's looking at the benefits that's going to be most advantageous for them.

Marc: Jim, you're right, we focus on Situational Social Security because we know that everyone out there is in a unique and different situation. 76 million baby boomers. Jim, you do the consultations for our company. Nobody wants to pay me for my advice. They pay us for your advice.  You can be meet with 10 different married couples, and each married couple will have a different set of circumstances that relate to their unique situation, and as a result, have different options and strategies that are available to them. Would you agree?

Jim: Oh, absolutely. It could be a married couple, it could be a single person, it could be someone with a deceased spouse in their past, or ex-spouses, or maybe children, all sorts of things to think about when you're getting ready to talk about Social Security.

Marc: Those probing questions, if advisors know what probing questions to ask their clients, it's more likely their clients will really get more money out of the system.

Jim, I want to spend a little time talking about a few of the myths relating to the Social Security Administration. Jim, how long did you work for SSA?

Jim: I worked there for 35 years, did a number of jobs, but started long time ago and retired while back as well, but spent 35 years with the agency.

Marc: How many of those years were fun, pleasant, interesting, exciting?

Jim: I pretty much enjoyed the whole time. There were certainly times, sometimes were better than others, most definitely, but that's the way it is with any job. I liked the people I worked with, for the most part, and I liked working with the general public. That could be a challenge sometimes, as probably most everybody knows, dealing with the general public can put that stress level right up there. I liked helping people, so I really enjoyed it.

Marc: Jim, the biggest myth that folks need to be aware of is that, you can get really, really good guidance and advice down at the local Social Security office. Please dispel that myth, please, Jim.

Jim: Yes, people at the Social Security office, they know Social Security. They don't know somebody else's other circumstances. When you go down there and talk to them, they may talk to you about retirement benefits or spousal benefits. They have no clue if you have an\y savings, an IRA, 401K, etc.. They don't know your particular situation. No, they're not going to talk to you about all the various strategies that you have. In fact, they're probably only going to go over the main ones that are available, "Are you eligible for retirement? Well, take a retirement application. Are you married? Well, get an application for your spouse."

I used to think they did a better job with survivors, but they don't. Will they help people? I think it's still better for folks to have an understanding of what's available to them before they contact Social Security because pretty much they're just order takers now.

Marc: Jim, you're just not going to get really good guidance down the local office. The representatives, Jim, like you always tell me, have been directed by their boss, the commissioner in Baltimore, not to review options with folks. Additionally, Jim, when you worked there, there were about 85,000 workers. Now they're more like 70,000. 15,000 or so have left the SSA, and they have walked out with 30 to 35 years’ experience, just like you did, Jim.

If somebody walks down to the local office. You are not going to walk down, maybe you'll take a pony or a horse, I don't know, but if somebody goes down to local office, Jim, and says, "Hey, I've heard about this restricted application," the representative will look at them like a deer looks into headlights. The biggest myth is, Social Security will not provide you any guidance.

Another myth is, Social Security will give you the correct answers. That is also incorrect. Right, Jim?

Jim: Yes, that's a problem we've been running into lately. Folks have contacted Social Security, and they're not getting the correct answer. They're not being told about the earnings test. They're just being told if they're under full retirement age, well, sorry, you're working, you can't file for benefits.

That may be true, and it may not. That's the problem. They're not asking them how much they're earning. Just because you weren't over the allowable amount for the year doesn't mean you won't draw most of your benefits. It depends on how much you go over. They're not really providing the information people need to know, and they're just giving them short quick answers, and people are losing benefits as a result.

Marc: Jim, I recall receiving a phone call from an advisor on a Saturday. The client of the advisor was scheduled for a phone call with SSA maybe a week later, two weeks later, whatever. The representative contacted the client on a Saturday saying, "We have time. Would you like us to take your application today?" Of course the client said. This was the situation of the client. They were single at one time. The wife was a surviving spouse, and she got remarried at age 60, or maybe 61, I don't know, but after attaining age 60, we know that. The Social Security representative said, "Well, since you were not taking any Social Security benefits before age 60, you are not eligible for a surviving spouse benefit now." The client was floored, didn't know what was going on. The advisor was so darn confused and irritated that he contacted me on a Saturday. He needed to talk, which is fine. I explained what the rule was, as long as the individual got married after attaining age 60, she would still be eligible for a surviving spouse benefit.

Jim, what do you have to say about that?

Jim: Yes, unfortunately the advice that they got her from the Social Security Administration was wrong. The rule is, as long as you remarry after attaining age 60, then you're still eligible for the benefit. If you're receiving it, you can certainly continue to receive the survivor benefit, but even if you're not receiving it, you can file for it later. There's not a distinction between remarrying after age 60 and receiving a benefit. It's just you have to remarry after age 60.

Had that person not had someone to go to, they would've taken what the individual told them and just lost benefits. Then over time, could they have ever gotten that back? It's possible. It's a hard process. I'm not going to say. The odds are not 100% they get it back. I'd say the odds are no better than 50/50, but maybe even worse than that. Unfortunately, that's been happening a lot.

Marc: Well, the good news in this situation is that the representative from SSA did call the client back and indicated that they were incorrect, they made a mistake from what they said. At least that's the good news, but it's just too bad, Jim, that this type of information, incorrect information, and guidance, is provided at the Social Security office. It really is.

Jim: How often would the person get called back? That was a good employee. The agency is full of good employees, but they're also not. Fortunately, that person took the initiative and found they were wrong, contacted the person, and was going to make it right, and that's important, but where it worries me are the folks that don't even bother trying to find out if they were right or wrong, and they never contact that person, and they find out much later, oh, you could have been drawn all this time, but you weren't. Sorry about that,

Marc: Jim, I was going to say something. Well, you know something? It escaped my memory. Oh, now I remember, Jim. That is why people take our education and subscribe to our support, so we are available to them almost on a moment's notice. When an issue comes up, something goes really strange at the local office, or you hear something from Social Security, it just doesn't make sense, they can just give us a call, por send us an email. That's the value of taking our class and subscribing to our support.

Jim, there's also a myth too, that the Social Security Administration, if you're a surviving spouse, will provide you with good guidance as to if should you be collecting your own benefit, should you be collecting a benefit off a deceased spouse, or even a deceased ex-spouse. Jim, one time when you worked there, you indicated that surviving spouses did receive good advice in that situation, but now you say that advice has gone south. Am I right?

Jim: Well, that's true. I used to think that was one area where the administration did a really good job taking care of the widows and widowers, making sure that they understood how they could draw benefits and when. Then I read this inspector general report. It's been a couple of years now, but they did a review of the Social Security Administration and found out they're doing a horrible job.

I was really sorry to hear that. These people are definitely going to be in a position where they probably need the best advice they can get on which benefit to take and when. Now the Social Security Administration has fallen down on the job there. They said there's just millions of dollars that have been lost that people will never recover, so it's unfortunate.

Marc: Jim, let's talk-- Excuse me. [chuckles] Jim, I drank a little too much eggnog already. [laughs] A spill over from Christmas Day, I guess.

Hey, Jim, let's talk about some of those strategies and options that are available to a surviving spouse. We do know that there's a provision which does not apply to surviving spouses, and that's called deemed filing. Deemed Filing says that when you file for benefits, you need to take any benefits that you are eligible for at the time of filing. There's more that goes with it also, but that's the essence of it.

Jim, for surviving spouses, deemed filing is not an issue, is it?

Jim: No, it doesn't apply to the survivor benefit. What that allows someone to do is take a reduced benefit early, a survivor benefit as early as age 60, or their own benefit as early as age 62, and then switch to the other benefit later. It's not reduced for age at that point. You could take a survivor benefit at age 60, if you wanted, and if it would give you more money, you could file on your own at 62, but you could also delay that. In the meantime, you're drawing the survivor benefit, and then you could file on your own at your full retirement age, or you could even wait till age 70 and earn those delayed retirement credits, but in the meantime, you have this money coming in.

Or, you take your own at 62, and the higher survivor benefit at your full retirement age. What it allows someone to do is take a lower benefit in the beginning, and it's reduced for age, switch over to a higher benefit later, and that's the one they're going to receive for a longer period of time.

In some of the strategies we've done for people, we've seen cases where over their lifetime, that makes a difference of $50,000 to $75,000 in benefits, and that's money that they would never make up if they didn't file it correctly. You want to make sure that people understand the options they have available to them so they can make the right decision.

Marc: Jim, when we do an analysis for surviving spouse, we're going to tell them to contact SSA to get that benefits matrix. How important is that benefits matrix, and what does that benefit matrix show?

Jim: Well, the important thing is it makes my job easier. [laughs]

Marc: Mine too.

Jim: That's why it counts. Now what it does, the benefit matrix will show their own benefit and the survivor benefit. It tells that person, if you take benefits at certain ages, and it lists every month, so for survivors, if you take a benefit at 60, 61 months, 62 months, 63 months, all the way up to full retirement age, and your own benefit from 62, up to as much as age 70. You can see if I start at these different points, how much my benefit amount is going to be.

The importance of that is it lets the person see the dollar amounts that they're going to receive, not only now but later, and they can make the decision, can I afford to take the lower benefit now to get the higher benefit later, is it worth doing that, how close are the benefits. It's real important. The benefit matrix is a great tool.

Marc: Jim, about three weeks ago or so, Social Security redesigned its website. What are your thoughts?

Jim: I don't like it, [chuckles] but they didn't ask me.

Marc: They didn't ask me either.

Jim: It's more the homepage I don't like. It seems like once you're inside the website, it's still pretty much the same or the same information. I'm just not a fan. I thought the original homepage was a little easier to navigate and to find what you're looking for, but it's all still there. That's the good news. I guess as we work with it, we'll learn a little bit more about it, but no, I'm not a big fan.

Marc: The Social Security website, for you folks that may not know, is www.ssa.gov.

Jim: gov.

Marc: That's Sam Sam Apple. .gov. Sorry, Jim. You're right. It's .gov. ssa.gov, or socialsecurity.gov. If you go to ssa.com, I don't know. I don't want to know what you're going to see. [chuckles] Anyway, that's for sure.

Jim, we're drawing to a close to this month's Social Security Talk podcast, but please, Jim, mention, for a couple of seconds or so, what's going on with that Restricted Application, because it's still out there for some folks.

Jim: Yes. The restricted application is still available for anybody that was born January 1st of 1954 or earlier. We know that there's about another year's worth left, so people are not going to receive it for a long period of time, but particularly if there's someone waiting till age 70 anyway to take their benefit, they can.  As long as their spouse is receiving retirement on their own work record, or a disability, they can file the restricted application, and they'll receive a spousal benefit.

Now, that doesn't affect their own benefit when they get ready to apply. They'll still get the same amount of money if they wait till age 70, whether they do the restricted application or not, and it doesn't affect their spouse's benefit. This is as close to free money as you can receive. Where you might run into folks is when your clients are telling you, "I'm going to be 70 in another three or four months. I'm getting ready to apply for Social Security." What you would want to say to them is, "Well, you know what? While you're waiting, let's do the restricted application. We'll give you six months of back pay. We can backdate that application six months. That's what Social Security allows you to do. Then you'll receive that." Once they get that established, you can file a new application for benefits to begin at age 70 on your own work record. That way, you'll get some income while you're waiting to reach age 70. It's not available to a whole lot of people, but those that do have it available to them, it's sure going to make them happy. You get somebody some extra money, nobody complains about that.

Marc: You always say, Jim, right now about 15% of our clients can still file that restricted app. When the law was passed back in 2015, it was more like two-thirds. Now it's definitely come down quite a bit, but the restrictive application does need to be in your Social Security toolbox. There's no doubt about it.

Jim, the 2023 National Underwriter Company’s Social Security and Medicare Facts book recently came out, and I'm really excited about that. If you look closely, Jim, you'll see our names listed at the bottom of this book. It's a great resource for advisors to have on their desks. It covers questions that relate to Social Security, Medicare, Medicaid, and related topics. It's an excellent book written in question-and-answer format. Advisors can purchase this book with a 35% discount by purchasing it through us. Send me an email if that's of interest to you. My email address is mkiner@mypremierplan.com. The website for our educational class is www.premiernssa.com, and my phone number is 513-247-0526.

Like I said before, I'm Marc Kiner, this is Jim Blair, and we teach the National Social Security Advisor Certificate Program, and we also do Social Security consulting to individuals across the country.

Jim, thanks so much for participating again in our Social Security Talk podcast. I had a lot of fun with you this year.

Jim: Yes, always happy to talk about Social Security, make sure people understand it. They get their benefits correctly, and it's, I enjoy it as well, so I had a good time.

Marc: All right, folks, this ends our Social Security Talk podcast, and the final one for 2022.

Until next year, take care and have a great New Year's. Bye, everybody.

Jim: Bye.