My first visit
I’ve been telling you for years to check out your social security benefits when you reach age 62. Not that you should necessarily begin benefits but that you should check it out. So when I turned 62 this month went down to the Social Security office in San Rafael.
The office is small with three windows behind which sat three clerks. A security guard greeted me and asked what I was there for. Apparently they categorize their visitors in order to pair them with the clerk who is most knowledgeable in that area. I asked how long it might take. The security guard said “10 minutes”. There was already one person at each window and there we 7 others waiting.
Can’t I do this by phone, or online?
After waiting for 20 minutes I asked the guard if I could take care of this online or on the phone. He told me that I could get basic information online and that the toll free number could be of some help but it was best to take care of it here. I waited another 10 minutes before they called my number and I met with Gloria.
The first thing I asked was could I do this on the phone. She said no, it would be very difficult, they have all the records here and the toll free number would go to another location. Okay. I still think it could be accomplished on the phone or online, but it doesn’t hurt to go directly to the office. And it’s not such a bad experience.
What will my monthly benefits be?
Gloria told me what my monthly benefit would be if I started now, at age 62. She told me that if I earned more than $14,160 they would reduce my benefit by $1.00 for every $2.00 I earned. Ok, so if I earn much more than $50,000 my entire benefit is wiped out. Not good.
If I wait until my normal retirement age, which for me is age 66, I can get about 30% more in monthly benefit. That seems like the wise thing to do. And if I wait until I’m 70 my benefit is about 30% more than that. Since there is no reduction for earned income at age 66 I’ll probably start taking benefits then. No sense waiting. I don’t know how long I’ll live. It will take a while to make up the difference.
Don’t wait to file for Medicare
Oh, she also mentioned that I need to apply for Medicare at age 65. Don’t wait until normal retirement age. I hadn’t asked about that, she offered it up. That’s points for her!
She says that if I were to start taking benefits now and then discovered that I would earn too much I could pay back the benefits and delay benefit until later. I have to do this within the first year and I can only do it once. You used to be able to do a “payback” when you reached normal retirement age, basically an interest free loan. They changed the rule early this year.
Should I take benefits now, at 62, or wait?
Some people can take their spouse’s early retirement at age 62 and then switch to their own full benefits at age 66. I don’t have a wife but I do have an ex-wife and was married to her for more than 10 years so I should be eligible for this benefit which would be half of her benefit.
The problem is that there is still a reduction if I earn more than $14,160. Another problem is that they will calculate my early retirement benefit and half of hers and pay me the higher amount. If the higher amount is mine, which it is, then I forfeit my even higher normal retirement benefit at age 66.
The reverse strategy works for many people, especially for those who have contributed very little to social security and whose spouse has contributed a lot. They take their own early retirement at age 62. Then when their spouse is eligible for benefits they take that higher amount.
This might work for my ex. Maybe not.
Glad I went
I’m glad that I went. I knew that I wouldn’t be applying for benefits but now I understand a little better the process that my clients go through. And this part, the visit to the Social Security office wasn’t so bad.
Oh, one more thing: I picked up a couple of brochures but didn’t really look at them until I got home. One was entitled “Social Security for Prisoners”. It turns out that you can’t collect benefits while you’re in prison but your beneficiaries can collect their benefits. I hope this part isn’t useful information.