A Social Security Owner’s Manual

Written By: Jim Blankenship, Jean M. Lown, Ph.D., CFP®

Do you speak Social Security? Can you explain: Do over? Deemed filing? File
and suspend? If not, it’s time to read A Social Security Owner’s Manual by Jim Blankenship, CFP^®. Blankenship wrote the book for the general public, but it is a great resource for educators and counselors.

As a financial educator and advisor, I’m well aware of the multiplicity of options for claiming Social Security (SS) retirement benefits, especially for married couples
who face complicated decisions. I’ve read numerous articles on Social Security claiming strategies in the academic literature, in industry publications, and in personal finance magazines. All are sufficient to raise awareness, which is very much needed, but an article can’t cover the range of Social Security claiming options faced by a diverse population of divorcees, widows, singles, and couples.

With longer life spans, ensuring that retirement resources last is a challenge for a growing segment of seniors. Despite often uninformed negative attitudes about the long-term viability of Social Security, the program is the bedrock of financial security in old age for millions of Americans.

While it would be ideal for everyone to have access to a financial fiduciary to help them navigate the complex decisions for when and how to apply for Social Security retirement benefits, the reality is that most Americans nearing retirement are dependent on an underfunded system of Social Security offices. One of the critically important points that Blankenship makes is that one can (mostly) rely on SS staff to provide information, BUT DO NOT rely on field reps to provide advice on which claiming strategy is best for your situation! There are a variety of complicated strategies to select from with tens of thousands of dollars at stake. Blankenship explains that SS staff are trained to help people select the largest benefit for which they qualify TODAY. Because far too many Americans are focused on claiming benefits ASAP, the staff assumes that most everyone wants their benefits now and do not want to delay gratification.

The majority of Americans start their benefits at the earliest age possible (62), locking in low benefits for life for themselves and their spouses. Blankenship emphasizes that Social Security provides longevity insurance! It essentially is an inflation adjusted pension guaranteed to pay as long as you (and your spouse) live. The section on “Coordinating Spousal Benefits” should be mandatory reading for couples.

“It pays to be informed…” (p. 80) literally! Too many retirees are selling themselves short through their ignorance and willingness to buy into the political rhetoric that Social Security won’t be around for long so they want to get theirs right NOW! Such short-sightedness often sells a spouse short, typically the wife who is likely to outlive her husband. Blankenship provides specific numerical examples for “Spousal Coordination Strategies” to illustrate why married couples need to carefully examine all their options before deciding when to claim retirement benefits.

Do you know about the “Do Over”? If you made a mistake and claimed too early, you can, within the first 12 months, repay benefits and re-set the payout period to a more beneficial claiming time. Learn about the benefits of the “File and suspend” strategy, the windfall elimination provision, and the government pension offset.

The book is a great resource for the professional who wants to educate themselves, clients, or students about how Social Security works and the range of options for claiming retirement benefits. It’s also invaluable to the uninitiated person who wants to find out their options before deciding when to claim retirement benefits.

The final chapter on “The Future of Social Security” provides some professional perspective on what the future holds as well as advice on why we all have a stake in the system and need to make our (educated) views known to our Congressional representatives.

The main topic I found lacking was details on widow’s benefits and claiming strategies. For a much more detailed guide to SS claiming read: Get What’s Yours: The Secrets to Maxing Out Your Social Security by Laurence J. Kotlikoff, Philip Moeller, & Paul Solman. A first step to prudent retirement planning is to create a “my Social Security” account at www.socialsecurity.gov/myaccount.