Social Security Claiming Options: Don’t ‘Save the Date’

What could be better than “save-the-date?” A lilac-scented envelope with frilly streamers usually heralds the announcement of upcoming nuptials with an attendant celebration to boot. Choose from the chicken or fish option and you’re on your way.

If only it worked the same way with Social Security. Unfortunately, “save-the-date” means something far different in this context, and it’s not an occasion to celebrate. Here’s how it works:

Litigation-averse Social Security agents (and who can blame them?) are instructed to open a file on a future recipient upon initial contact, even if it’s simply to ask a question about payments they have no intention of immediately taking. The recipient might be at age 62 and not planning to begin receiving benefits until age 70; no matter, the file is created.

It might seem like a trivial matter and the file sits inert until the recipient is ready to claim, but it’s not the case. Social Security agents are instructed to help get recipients as much as they can. That’s a good thing. The problem is that they are also instructed to get recipients that money as soon as they can. That may not be so good.

That’s because Social Security agents must get you the most they can at that defined date; they can’t (and don’t) look at the big picture.

(See my previous blog on the role of Social Security Administration agents, Don’t Take Retirement Advice From the Social Security Administration.)