The Wall Street Journal had an article by Anne Turgeson that was published in this Sunday's San Diego Union Tribune Free Tools for Optimizing Social Security Benefits - WSJ:
It is basically a review of various online tools that people can use to help them make the all-important, once-in-a-lifetime decision of when to start collecting social security. The decision to start social security is not only complex, it is also complicated selecting a tool to assist in making the decision. Anne Turgeson's article helps! There are a lot of other online advice columns to help people make the decision:
On top of all of this, there are many arcane rules that complicate filing for social security, many of which are not clearly documented. For example, if your birthday is on the first day of the month, you have to file two months prior to the date you want to start. Some of the rules are in contention--in that either the President or Congress would like to change the rules (generally to save money, or "close a loophole") What happens if we make our decision, or plan, and then the rules change?
Why does it need to be so complicated? I believe the decision is too complicated for most Americans to make a good decision to optimize their return from Social Security. The difference can be amazing! This article points out that even the experts who create these online tools don't do as good of a job as many of us might need to make the best decision. It is also very difficult to get the best answer from the SSA staff at local offices. It is hard to get an appointment, and the tools they currently use have some limitations. Divorces and remarriage also severely complicates determination of how much can be earned based upon a spouses earnings under the various options.
I have a Master's degree that focused on good financial decision-making, and I now think maybe my wife and I didn't make the optimum decision. I have subscribed to the American Association of Individual Investors bulletin (AAII) for many years, and it has had expert explanations of various alternatives, but we still missed at least one opportunity to improve upon our total social security benefit. If I couldn't make the best decision, I have the feeling that a LOT of Americans will make the incorrect decision. How many read AAII publications, the Wall Street Journal, or look for online calculators when making the decision.
One of my well educated close relatives who had been in questionable health made her decision to start social security too late, and only collected for a little more than a year before she died While another well educated one in excellent health decided to start collecting significantly reduced amount at age 62, even though she didn't need the money. Her rationale was simply: "I may drop dead tomorrow, and who knows if social security will still be paying in a few years!"
When we receive our social security statements, they are personalized for our own benefits. The SSA system knows we are married, and it knows our spouses earnings and SSA benefits. It seems to me that SSA could provide both spouses with the various options for when to start based upon our ages, our lifetime earnings and when we decide to start. The complicated options of "file and suspend" and "collect and then payback" probably don't need to be included. In fact, it seems that those types of options should only be permitted in very special cases, such as several medical situations. Even if the SSA statements don't include that information, it seems that the SSA website could have a way of handling "joint" situations.
It is basically a review of various online tools that people can use to help them make the all-important, once-in-a-lifetime decision of when to start collecting social security. The decision to start social security is not only complex, it is also complicated selecting a tool to assist in making the decision. Anne Turgeson's article helps! There are a lot of other online advice columns to help people make the decision:
- Forbes Magazine: http://www.forbes.com/forbes/2007/1112/092.html
- 2012 article by Morningstar: http://news.morningstar.com/articlenet/article.aspx?id=343180
- 2012 article by "Market Watch" http://www.marketwatch.com/story/social-security-claiming-tricks-to-maximize-payout-2012-10-18 It includes options such as "file and suspend" etc.
On top of all of this, there are many arcane rules that complicate filing for social security, many of which are not clearly documented. For example, if your birthday is on the first day of the month, you have to file two months prior to the date you want to start. Some of the rules are in contention--in that either the President or Congress would like to change the rules (generally to save money, or "close a loophole") What happens if we make our decision, or plan, and then the rules change?
Why does it need to be so complicated? I believe the decision is too complicated for most Americans to make a good decision to optimize their return from Social Security. The difference can be amazing! This article points out that even the experts who create these online tools don't do as good of a job as many of us might need to make the best decision. It is also very difficult to get the best answer from the SSA staff at local offices. It is hard to get an appointment, and the tools they currently use have some limitations. Divorces and remarriage also severely complicates determination of how much can be earned based upon a spouses earnings under the various options.
I have a Master's degree that focused on good financial decision-making, and I now think maybe my wife and I didn't make the optimum decision. I have subscribed to the American Association of Individual Investors bulletin (AAII) for many years, and it has had expert explanations of various alternatives, but we still missed at least one opportunity to improve upon our total social security benefit. If I couldn't make the best decision, I have the feeling that a LOT of Americans will make the incorrect decision. How many read AAII publications, the Wall Street Journal, or look for online calculators when making the decision.
One of my well educated close relatives who had been in questionable health made her decision to start social security too late, and only collected for a little more than a year before she died While another well educated one in excellent health decided to start collecting significantly reduced amount at age 62, even though she didn't need the money. Her rationale was simply: "I may drop dead tomorrow, and who knows if social security will still be paying in a few years!"
When we receive our social security statements, they are personalized for our own benefits. The SSA system knows we are married, and it knows our spouses earnings and SSA benefits. It seems to me that SSA could provide both spouses with the various options for when to start based upon our ages, our lifetime earnings and when we decide to start. The complicated options of "file and suspend" and "collect and then payback" probably don't need to be included. In fact, it seems that those types of options should only be permitted in very special cases, such as several medical situations. Even if the SSA statements don't include that information, it seems that the SSA website could have a way of handling "joint" situations.
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