Taxes

Ask Larry: When Should I Switch To My Social Security Retirement Benefits?

Today’s Social Security column addresses questions about when to switch from survivor’s benefits to retirement benefits, survivor’s benefits amounts after taking spousal benefits and whether claims of taking full retirement benefits at 55 are credible. 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.


When Should I Switch To My Social Security Retirement Benefits?

Hi Larry, I’m currently receiving survivor’s benefits while my retirement benefits increase till 70. My retirement benefit is already higher. In May I will be 70. Should I take it before May? Currently I’m healthy, but 10 years ago, I had a health concern. What are your thoughts? Thanks, Helen

Hi Helen, My answer would depend in part on how much difference there is between your survivor benefit rate and your retirement benefit rate. Ultimately, though, you should choose the strategy that you’re most comfortable with.

If you start your retirement benefits in January instead of May, your permanent monthly rate will be roughly 2.66% lower than it would have been if you’d waited until May. So you’d need to weigh that loss against the four additional months of higher benefits that you’d receive by switching to your own record in January.

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, Larry


Would My Mother Receive My Father’s Full Benefit Amount If He Dies?

Hi Larry, I’m asking this question on behalf of my father, who is 82 and receives $1,550 in Social Security a month. My mother is 69 and never accumulated enough Social Security credits, but receives a $435 Social Security spousal benefit. If my father were to pass, would the $435 a month be replaced with the $1,550? Thanks, Tomás

Hi Tomás, Yes, the surviving member of a couple is eligible for at least the higher of their two benefit rates as long as the surviving spouse doesn’t start drawing widow’s benefits prior to full retirement age (FRA). So since your mother is already over FRA, if your father dies she’ll be paid his full benefit amount instead of the amount that she currently receives.

Assuming that what your mother is collecting now is a spousal benefit, she won’t need to apply for widow’s benefits. Spousal benefits are automatically converted to survivor benefits as soon as Social Security receives notice of the worker’s death, provided that the surviving spouse is FRA or older. Best, Larry


Is There A Way To Start Collecting Your Social Security At Age 55 Even If You Aren’t Disabled?

Hi Larry, I hear people talking about a Social Security “fast forward” or a “pop up plan” where you can start collecting at 55 even if you’re not disabled. These aren’t survivor’s benefits either. I’ve also seen and heard ads for other ways to supposedly get all your benefits at once instead of getting monthly payments for the rest of your life. Some seem pretty sketchy but I just can’t tell for sure. Is there any truth to any this or is it bunk? Thanks, Betsy

Hi Betsy, There’s no truth to people supposedly being able to get Social Security retirement benefits at 55. The earliest that you can collect Social Security retirement benefits is at 62.

You also can’t opt out of Social Security and receive a refund of your contributions. Nor can you choose to receive a lump sum payment in lieu of monthly benefits. And there’s no “magic words” you can say or write when you apply to get higher benefits either.

Social Security retirement benefits are calculated based on your 35 highest years of earnings that you paid SSA tax on and when you file. Your birth year also affects how your earnings are indexed for inflation, and other factors, such as pensions based on income you didn’t pay SSA tax on, the earnings test and the family maximum that can be claimed on a single record can lower your actual benefit rate. Best, Larry


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