My email inbox continues to fill up with complaints from financial advisers and individuals about false information they have received at their local Social Security offices when they attempted to file and suspend their benefits before the April 29 deadline. The frustration is palpable and some have even turned to their members of Congress for help.
One adviser from North Carolina relayed the story of a couple who visited their local Social Security office in mid-March, the day after the husband's 66th birthday. He wanted to file and suspend his benefits so that when his wife turns 66 next year she could claim only spousal benefits for up to four years while her own benefit would continue to grow by 8% per year up until age 70. At 70, they would collect their maximum retirement benefits.
“They were told by the local Social Security office that they could not do that — the claiming strategy was no longer allowed,” the adviser said. When they asked for something in writing that supported the disallowance, the Social Security representative showed them documentation that stated the “loophole” would be closed for anyone who was not age 66 by April 29. The couple pointed out that it was not yet April 29 and the husband was 66. They still were told they were not allowed to use that claiming strategy, the adviser said.
Next, the couple called the Social Security Administration's toll-free number (800-772-1213) and again they were told the claiming strategy was no longer available. “They are now in the process of asking their representative in Congress to help,” the adviser added.
This is just the latest in a string of similar complaints. In some cases, clients have been told that both spouses have to be 66 before April 29 in order to file and suspend. That is not correct. Only the spouse who is requesting to file and suspend benefits must be 66 by the end of April.
It seems that many local Social Security offices are consistently offering the same bad information, and that is worrisome. Some readers have even suggested that the misinformation campaign is intentional and designed to block eligible individuals from taking advantage of this disappearing claiming strategy. I suspect it is more a reflection of mass misunderstanding and incompetence than intentional misdirection.
Another adviser, Steven Goldberg from Silver Spring, Md., sent me this note from the trenches.
“Dealing with Social Security is quite a mess just now,” Mr. Goldberg, 67, wrote via email as he attempted to file and suspend his benefits before the April 29 deadline. “They almost never return their calls even though their voicemail encourages you to push buttons on your phone to request a call back.”
“It's impossible to schedule an in-person visit to the local office in Silver Spring,” he added. “An aide to Rep. Chris Van Hollen told me 'the lines are around the block' if you just show up.”
What does work? Filing for your benefits on line at
ssa.gov. But you need to know the secret handshake.
Nowhere on the online application does it mention how to file and suspend your benefits. Assuming you will be at least 66 years old by the end of April, complete the online application as if you plan to start collecting your benefits as soon as possible. But on the last page of the application, in the “remarks” box, write: “I want to suspend all my benefits.”
If you want to claim only spousal benefits, it's a bit easier. If you are at least full retirement age (66) and you are entitled to both your own retirement benefit and a benefit as a spouse, the online application asks whether you would like to collect only spousal benefits. Check yes. Under the new law, anyone who was 62 or older by Jan. 1 still can claim only spousal benefits when they turn 66.
Someone from SSA will contact you to verify all of the information before the agency processes your request. In the past, most applicants received a call back within a few days. Now it seems to be taking a bit longer. But don't worry, SSA has vowed to honor all requests to file and suspend benefits that are submitted by April 29, even if the agency is unable to process the request until after that date.
Requests to file and suspend that are submitted after the April 29 deadline will be subject to a new set of rules. No one will be able to collect benefits on a worker's Social Security record during a suspension and a lump sum payout of suspended benefits will no longer be allowed.
I have yet to hear any complaints from anyone who filed for their benefits online. Perhaps the employees who are monitoring the online applications are better trained than those in the local offices. I can't say for sure, but it seems that filing online sure beats standing in line.
(Questions about new Social Security rules? Find the answers in my new ebook.)
Mary Beth Franklin is a contributing editor to InvestmentNews
and a certified financial planner.
