When to file

Forum|Forum|4 years ago
July 15, 2021
3 replies
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I see ads targeted at individuals who are close to retirement age. They all include the hook about missing out on benefits or making mistakes when filing for SS as if there is some secret the government doesn't want us to know about. I plan on waiting till my full SS age 66 and 8 months but are these ads valid? Do people really make mistakes out of ignorance of the rules?

Thank you

Best answer by Joe_D-CPA-PFS-CFP

Chuck,

I don't believe the Government doesn't want you to know how to receive the maximum benefit because there are many rules and strategies that can help increase your overall benefits based on varying circumstances. I can't speak for any particular service that may offer assistance in helping you claim the most beneficial scenario for you. I do believe you should carefully consider all the available options before making a permanent decision and an advisory service or a specialized financial professional may be able to help you make the best decision.

Here are some examples of mistakes that can be made:

Most beneficiaries claim benefits too early, and it happens because they underestimate life expectancy. Social Security is longevity insurance. It protects you from outliving your income should you live a long time.
Relying on the Social Security Administration (SSA) is a common error. I’ve heard anecdotes of people receiving incorrect advice from SSA representatives and being given different answers to the same question by different SSA reps.
Many people don’t realize all the benefits for which they’re eligible because they don't know all the rules.
Another common oversight is not realizing some benefits decisions can be changed.
Claiming benefits at age 62 while you are still working permanently reduces your monthly benefit and your benefits are limited based on your other income until full retirement age.

Kelly Thomas C

Level 5

Don't let them scare you into rushing your any of your decisions. The main thing you need to do once you are near 65 is sign up for Medicare. Pushing off your social security retirement income to your late 60s is a smart thing.

Good luck to you.

Kelly C, CPA

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wildbillholiday

Level 2

just a comment about applying for medicare at age 65.

i applied at 65, birthday is in nov., and got my card, i was still working and i am still working now at almost 70.

i have health insurance through my employer who offers flex -spending and a HSA.

in the following january i wanted to go with the HSA program since the company will contribute money.

well because i had applied for medicare and received my card i was not able to select the HSA.

IRS, the government, will not allow you to participate in a HSA if you have the card, so i had to use the flex -spending

i essence it has cost me quite a bit of money. i am almost 70 now and because of my age i wanted to have a some extra money in case of an unforeseen health problem. with flex you use it or lose it, so i had to spend the left over money on unnecessary spending (i have a few pairs of RAY-BAN frame prescription glasses).

whereas if i had the HSA i would have money to carry with me after i retire to pay medical expenses.

¨But if you’re still working at 65, and you have coverage under a group health plan through an employer with 20 employees or more, then you don’t have to enroll in Medicare right now.

it is not mandatory that you sign up at 65 if you are still working at 65, and you have coverage under a group health plan through an employer with 20 employees or more¨

Chuck_from_SCAuthor

Level 2

Great Information!! I plan to work beyond 65

Joe_D-CPA-PFS-CFPAnswer

Level 5

Chuck,

Here are some examples of mistakes that can be made:

Most beneficiaries claim benefits too early, and it happens because they underestimate life expectancy. Social Security is longevity insurance. It protects you from outliving your income should you live a long time.
Relying on the Social Security Administration (SSA) is a common error. I’ve heard anecdotes of people receiving incorrect advice from SSA representatives and being given different answers to the same question by different SSA reps.
Many people don’t realize all the benefits for which they’re eligible because they don't know all the rules.
Another common oversight is not realizing some benefits decisions can be changed.
Claiming benefits at age 62 while you are still working permanently reduces your monthly benefit and your benefits are limited based on your other income until full retirement age.

Chuck_from_SCAuthor

Level 2

Joe:

Great answer thank you so much. I do have a financial advisor.

Opus 17

Level 15

The ads are trying to sell you a product or service. Having a financial planner is a good idea because the rules are complicated, but don't pick one from a scare advert.