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The Biggest Threat to Your Social Security Benefits

By Dan Caplinger - Sep 2, 2018 at 6:02AM

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Surprise: It has nothing to do with the program's finances.

Tens of millions of people rely on the money they get from Social Security to make ends meet in retirement or if they become disabled. Most people anticipate when they'll be able to claim their retirement benefits, looking forward to their 62nd birthdays as the first time at which they can get payments based on their work histories.

Yet Social Security is complicated, and there are a lot of other rules about the program that people don't know about. One thing that an increasing number of Americans find most frustrating about Social Security is that you might not even know about benefits that you're entitled to receive -- and for the most part, neither the Social Security Administration nor anyone else will proactively tell you about them if you don't ask. What that means is that the biggest threat to your Social Security benefits is not having the information to figure out what those benefits should be -- and when you can get them.

Side of an office building with words Social Security Administration on it.

Image source: Getty Images.

One sad story

One example of this all-too-common phenomenon came out of Ohio recently. According to reports from investigators for the local Cleveland ABC affiliate, an Akron man initially filed for Social Security benefits back in 2009. He had previously been married, and his ex-spouse had subsequently passed away after their divorce.

The Social Security Administration reportedly gave him a choice between his own retirement benefits and benefits on his ex-spouse's work record, since they had been married for longer than 10 years. What the SSA didn't do, according to the man, was explain fully that he could claim survivor benefits while choosing not to claim his own retirement benefits, instead collecting delayed retirement credits that could result in larger payments in the future.

Only seven years later did the man find out about the fact that he could have claimed survivor benefits two years earlier at age 60. He then went back to the SSA to claim those survivor benefits, but according to the reports, he has thus far been unable to collect the full amount, with his advisors telling him that he might only get a year or less of those benefits back.

The challenge of getting good information

It can be incredibly difficult to get correct information about the details of the Social Security program. Even the SSA's own employees don't always get things right, and despite the fact that you might feel as if you should be able to rely on what those employees say, it hasn't always been a good idea to do so. In a report from the SSA Inspector General earlier this year, the problem of coordinating retirement benefits with survivor benefits proved to be one of the most difficult for SSA employees to get right. The report took a sample of 50 different people in that situation and analyzed the guidance that employees gave them. In 41 cases, recipients could have gotten a higher payout if they had chosen to take their survivor benefits while delaying taking their own retirement benefits. By contrast, in only one case did the person actually make the right move.

As tough as it is to learn about benefits, the price of not doing so can be high. Underpayments can cost you thousands of dollars each year, adding up to hundreds of thousands over the course of a lifetime.

Look out for yourself

The Social Security Administration is taking steps to try to improve its internal controls to make sure that people in this and similar situations get the information they need to make the best decision for their long-term finances. However, those efforts will likely be slow, and there's no guarantee that SSA employees will be able to keep up with future changes to the program.

The best solution is to stay on top of your own benefits by using reputable sources that accurately and completely explain the benefits you're entitled to receive. If you have the right information, you'll be in the best position to make the smartest choice possible -- and get all the money you should.

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