My Unbelievable Conversation With Social Security

I just got off the phone with a Social Security claims advisor. The call was initiated by a financial advisor, Kelly, who had used my company’s software with her age-63 client, Joan. Joan is newly widowed. Our software advised Joan to start her Social Security retirement benefit now, at a reduced level, and, at full retirement age — close to 67, to take her widows benefit when it would start at its highest annual value.

When you are eligible to collect a widows or divorced widows benefit, you don’t have to file for your own retirement benefit at the same time, and vice versa. Since the system will pay you only the larger of the two benefits, it’s always best to take one benefit first while letting the other grow.

Kelly’s client wasn’t sure she trusted our software. So, she called Social Security with Kelly on the line. The agent said, Absolutely, you must file for all benefits at the same time to which you are eligible.

Imagine you are 62, widowed, and have a upper-middle income earnings history. Your age-62 widows benefit is a few dollars more each month than your retirement benefit. In the case I just ran in Maximize, taking both benefits at once will cost you over $400,000 in present value — about seven years of after-tax earnings! The reason is you have the option to wait till 70 to collect your retirement benefit — if you don’t check the box that says you are filing for both benefits or if the claims rep doesn’t check the box without your knowledge! If you wait to file for your retirement benefit at 70, it will be 76 percent higher adjusted for inflation.

After their call, Kelly called me and asked if our software was correct. I said, yes, it’s correct. I also told her about a report that Social Security’s Office of the Inspector General had issued in 2018 about what I call Social Security’s Widows Scam. The report indicates that Social Security effectively defrauded some 13,000 widows out of over $130 million dollars by filing them or letting them file for the two benefits at once. The scam works both directions. It may be best to file first for your retirement benefit and wait till full retirement age to file for your widows benefit — Kelly’s client’s case.

I asked Kelly to call Social Security again with the client on the line and to loop me in. Maybe because it’s Thanksgiving week, Kelly got through quickly and was able to put me in contact with the Social Security claims rep. Kelly explained the case. The claims rep said give me a few minutes. Ten minutes later she replied that widows couldn’t receive Delayed Retirement Credits after full retirement age.

I pointed out that the issue wasn’t DRCs. The client was only 63. The issue was whether she would be forced, deemed in Social Security lingo, to take both her retirement and widows benefits at once. The claims rep said let me research this. Another 10 minutes passed and she came back and started taking about the need to take retirement and spousal or divorced spousal benefits at the same time. This too wasn’t relevant. Finally, I said please just search in Google for “deeming of retirement and widows benefits.” Immediately, she came up with this link on Social Security’s website. It includes this statement,

Deemed filing applies to retirement benefits, not survivor’s benefits. If you are a widow or widower, you may start your survivor benefit independently of your retirement benefit.

The agent agreed that Kelly client could file just for her retirement benefit and wait till full retirement to collect her higher widows benefit. I then asked the agent how long she had been trained on Social Security provisions prior to fielding calls. Her answer was four months. In those four months, she had, she indicated, never heard about the widows benefit scam.

I gave her my email and asked her to mail me her address. I’m sending her my two co-authored book — Get What’s Yours — the Secrets to Maxing Out Your Social Security Benefits and my just published book, Social Security Horror Stories — Protect Yourself From the System and Avoid Clawbacks.

Four months is long enough to get the essentials right. If Social Security gave all 10,000 of its claim reps these books, it would dramatically reduce the number — 1 million — of clawback letters its sending Americans of all ages and stations in life each year. It would also keep the Agency’s staff from knowingly or unknowingly perpetuating the scams both books, but particularly the new one detail.

But here’s the kicker. I asked the agent whether she had been trained to automatically file everyone for whatever benefits they could immediately receive. She said yes. (Kelly’s my witness!) She said she was told this would give everyone a fair chance at getting all their benefits.

This explains why the widows benefit scam is so pervasive. The claims reps aren’t just being misinformed, they are being told to do exactly the wrong thing!

My bottom line. The safest way to get a correct answer from Social Security is never ask them a question. And if you file over the phone, DON’T. Go into the office and get documentation that you have been filed only for the benefits for which you applied. If not, expect them to say,

Sorry, the 76 percent higher check isn’t coming at age 70. You checked the box and have been collecting your retirement benefit for 8 years. Yes, you didn’t receive a penny more by checking the box. But that’s not our fault. Your widows benefit was higher. What? You say you didn’t check the box and couldn’t because you called on the phone. What? You say we checked the box in violation of your instructions? Where’s your proof. Have a Happy Thanksgiving.

Related: Was Social Security’s Software Hacked? And Was It Hacked in 2022?