Are you being underpaid by Social Security?

Part of being a financial advisor who works with retirees is helping clients determine how to potentially maximize their Social Security benefits. With some of the changes that happened to spousal benefits, such as the removal of “file and suspend” and “claim now claim more later,” many claimants may incorrectly believe this applied to their survivor benefits as well.

A recent report in February from the nspector general of the Social Security Administration stated that the “SSA had underpaid roughly $131.8 million to 9,224 beneficiaries age 70 and older, and will underpay an additional 1,899 beneficiaries who were under age 70 $9.8 million, annually, beginning in the year they attain age 70.”  The report also goes on to state, “We did not find any evidence SSA had informed claimants of the option to delay their retirement application when they applied for benefits, as required.”

To put that in plain language, if you are entitled to a survivor benefit from a deceased spouse, you can claim the survivor benefit and let your own retirement benefit grow until age 70 to potentially maximize your payout. On top of that fact, the employees at the Social Security Administration are required to give you that information. This audit found that they did not for almost 82 percent of widowed spouses who are entitled to higher benefits.

If you believe you may be affected, you may be receiving notification from Social Security. The report does recommend taking action for those identified. If you are at or near retirement, it would be prudent to understand the different aspects of Social Security benefits and what you are eligible for. It is an extremely important part of preparing for a successful retirement, and one we ensure we speak with our clients about. Let us know if we can help with your retirement strategy.

To read the full report, go to https://oig.ssa.gov/sites/default/files/audit/full/pdf/A-09-18-50559.pdf.

Robert Jeter CFP, CRPC, offers securities and advisory services through Cetera Advisors LLC, member FINRA/SIPC. To reach Jeter, email robertj@retireinfocus.com. The views of Robert Jeter should not be construed as specific investment advice. Investors cannot directly invest in indices. Past performance is not a guarantee of future results. Cetera is under separate ownership from any other named entity.