Taxes

Ask Larry: How Can I Avoid Mistaken Retroactive Payments When Applying At 70?

Today’s Social Security column addresses questions about not having retroactive payments applied at 70, when spousal benefits can be paid to someone receiving their retirement benefit and what happens to disability benefits at full retirement age (FRA). Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


How Can I Avoid Mistaken Retroactive Payments When Applying At 70?

Hi Larry, I am preparing to apply for my Social Security (actually I have been procrastinating out of fear of doing something wrong or more to the point SSA making a mistake). I have been waiting because my husband made some bad choices retiring early that will affect my income after he is gone. I wanted to max out my benefits by waiting as long as possible. My disabled adult son currently collects childhood disability benefits under my husband’s retirement but should receive a higher amount once I apply and he begins receiving benefits under my account.

You mention in your book that people should make sure SSA does not apply retroactive pay to when applying by stating in writing that I want to start taking my retirement starting on my 70th birthday and not a day sooner. You recommend doing this in person or online. I would prefer online however, you mention that one is not able to apply for child benefits using the online method.

Does that apply to Disabled Adult Children? If I apply online can I make a notation in the remarks section that I have a disabled adult child and follow up once I am approved to have him switched over? How would I follow up and ensure that SSA does not do something to my application preventing me from collecting at the official age of 70 and not a day earlier, or preventing him from moving to the higher amount that my retirement benefit should afford him?

I have been so paranoid about making a mistake or having SSA make a mistake I am almost paralyzed about applying, which is unlike me. But the ramifications of a mistake being made could have life long affect for myself and my son’s income.

Thank you for your consideration of my questions and I look forward to receiving a response. Thanks, Carolyn

Hi Carolyn, I understand. Tape record your call with Social Security. Let them know you are taping it. That will provide you with backup.

If your husband’s age 70 benefit would have been lower than your age 70 benefit, his filing early will not mean you’ll receive less were he to pass. You get the max of his or your check. Best, Larry


Can I Collect On My Wife’s Record?

Hi Larry, I am 74 and on my own Social Security for a number of years.I collect about $1,275 a month. My wife is retiring soon at 70. She will be collecting about $3,800. Will I be able to collect a benefit on her record? Thanks, Vince

Hi Vince, I can’t give you a definite answer. The most you could get is 50% of your wife’s PIA, though, not 50% of her age 70 rate. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

You can’t elect to stop receiving your own retirement benefits and get spousal benefits instead. However, you could file for an excess spousal benefit when your wife files for her benefits, which could potentially be paid in addition to your own benefit. You’ll only qualify though if 50% of your wife’s primary insurance amount (PIA) is more than your own PIA.

If you qualify for an excess spousal benefit, that benefit would not be reduced for age since you have already reached your full retirement age (FRA). However, if you started drawing your own benefits early then you’d be stuck with the resulting reduction for age. You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, LarryBest, Larry


If I’m Receiving Disability Benefits, Do I Need To Apply For Standard Social Security When I Reach Retirement Age?

Hi Larry, I’ve been on disability since 2006. I wondered if when I get to whatever the retirement age will be, will I need to “apply” for my Social Security retirement benefit or do does it automatically switch over? Thanks, Hal

Hi Hal, You won’t need to do anything assuming that what you’re drawing is a Social Security disability (SSDI) benefit. In that case, Social Security will automatically convert your SSDI benefits to standard Social Security retirement benefits when you reach your full retirement age (FRA). Your benefit rate won’t change as a result of the conversion. Best, Larry


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