Jason interviews Kirk Larson about how to claim Social Security.
Kirk Larson is the Washington Public Affairs Specialist for the Social Security Administration. He has worked with the agency for over 24 years in both technical and supervisory roles. Kirk has presented Social Security information in both the Seattle and San Francisco Regions. He has had numerous articles published and has appeared on TV and radio shows to discuss Social Security issues. He has received several awards for his public service and outreach efforts.
To learn more please visit www.ssa.gov
Below is the full transcript:
Announcer: Welcome back America to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now, here is your host: Jason Parker.
Jason Parker: America, welcome back to another round of Sound Retirement Radio. I’m your host, Jason Parker. As always, I want to remind you, you can listen to these programs online, so if you are driving down the road this morning and you are not going to be able to catch the whole thing, check it out online.
We have been spending the month of January really zeroing in on social security and we’ve got a great guest we’re going to bring back for our program this morning on the how to claim social security. But before we do, I always like to get the program started by renewing our mind, and I’ve got a verse here for us. This is John chapter eleven verse forty-seven through forty-nine. “Then the chief priest and the Pharisees called a meeting of the Sanhedrin. ‘What are we accomplishing?,’ they asked. ‘Here is this man performing many signs. If we let him go on like this, everyone will believe in him. And then the Romans will come and take away both our temple and our nation.'” Wow. Actually that was verses forty-seven through forty-eight, but it kind of makes me wonder, what are you afraid of losing by believing in who Jesus is? I think we all have to grapple with that at some point. There’s definitely a fear of loss by believing.
I always have a joke that I want to start with. So this one is recently. When my parents were making their funeral arrangements, the cemetery salesman pointed out a plot that he thought would look … That he thought they would like to look at. “You’ll have a beautiful view of the swan pond,” he assured them. My dad wasn’t sold. “Unless you’re including a periscope with that casket, I don’t know how I’m going to enjoy it.” (laughing)
All right. So, it’s my good fortune. You’re listening to episode zero eight five, episode eighty-five, “How to Claim Social Security.” We’ve had Kirk Larson on the program in the past. Kirk Larson is the western Washington public affairs specialist for the Social Security Administration. He has worked for the agency for over twenty four years in both technical and supervisory roles. Kirk has presented social security information in both the Seattle and San Francisco regions. He has had numerous articles published, and he’s appeared on TV and radio shows to discuss social security issues. He has received several awards for his public service and outreach efforts. Kirk Larson, welcome back to another round of Sound Retirement Radio.
Kirk Larson: Thank you very much. I appreciate you having me here to discuss social security issues.
Jason Parker: Aw man, our listeners really appreciate it too, Mr. Larson. I wanted … One of the questions we get asked often is, “When should I apply for my benefits?” So let’s say somebody is going to be turning sixty-two in one month, and they know they want to start their benefits right when they turn sixty-two Kirk. How do they start that process and when should they?
Kirk Larson: Very good question. Actually, I’ll go ahead and start off. First of all, when you’re turning sixty-two, you cannot file unless you are born on the first or the second of the month. If you’re turning sixty-two, you’re actually going to have to wait until you’re sixty-two an entire month. So if you’re turning sixty-two in January, on January 5th, you actually cannot file with January 5th. You have to be sixty-two for an entire month. The one provision we have though is if you’re born on the first or the second, we consider you to be sixty-two throughout the month. So in that situation, if you were turning sixty-two in January, January 5th or anything after the second, you’re actually going to have to wait until February.
Jason Parker: Hmm okay.
Kirk Larson: And then if you’re filing with the month of February, you can go ahead and do that. And also another important fact to remember, we pay all of our benefits one month behind. So if you’re going to file with the month of February, your first check is going to arrive in March, and then March’s check arrives in April, and April arrives in May, and so on.
There are several different ways, of course, but a good way and actually, interestingly enough, the state of Washington … Here in the state of Washington lead the nation for doing this, is filing online. Close to about sixty-five percent of all people now filing for retirement benefit or spouses benefits or medicare benefits, they file for benefits right online meaning they don’t go into an office, they don’t call us, they just get on their computer, go to the social security website at www.socialsecurity.gov and just pull up the retirement application, complete it right there, submit it, and it goes through very quickly. And you are filing that … Oh, go ahead.
Jason Parker: Oh, I was just wondering, are there any limitations for people if they were born before January first, nineteen fifty-four and they’re still interested in doing the restricted application? Is that still available to do right there on online too? Are there any nuances where people should not file online?
Kirk Larson: Well, number one, if you’re filing for survivors benefits, you wouldn’t be able to file online. Survivors benefit is still an application that has to be done either over the phone or in an office. With spouses benefits or retirement benefits, even with these changes in the law that we had discussed previously on your show that are taking place, meaning the file-and-suspend rule that’s going away and the restricting your application is going away, you can still do those online. Basically there is a remarks section that allows you to go ahead and put in the remarks saying, “I am restricting this application to spouses benefits only” or “I am restricting this application to retirement benefits only.” You would be able to go ahead and put that in the remarks section and then the person approving your claim would go ahead and leave those remarks and understand what you’re trying to accomplish. Or if it was unclear to them, they would be able to call you and say, “Is this what you’re trying to do?”
Jason Parker: Okay. Now what about … So you mentioned the timing there. Can people do this … We work with a lot of people that like to be proactive. Is there any time period before where they could just say, “Hey you know I just want to get everything set up and rolling maybe a couple weeks, couple months, ahead of time and get the benefits started.” Can they do that, or do they have to actually wait until they hit that age criteria?
Kirk Larson: You know, you can go up to three months into the future.
Jason Parker: So if … [crossover 06:55]
Kirk Larson: So if this is January, you could go through January, February, March, April, and you could say you want your benefits to start with the month of April.
Jason Parker: Okay. So that’s nice. So people, they don’t have to wait until the last second or wait until after the fact. They can actually be proactive on this.
Kirk Larson: That’s correct. However, I will say this, because of the way that it is structured, if you do this online or if you go into an office and you do it in the future, we are probably not going to get around to approving your claim until it’s closer to that date because we’re trying to prioritize cases and approve people that are due benefits next month as opposed to you who might be selecting April. So don’t be surprised if you go online and you say, “Hey I want to do this two or three months into the future,” you can complete the application, you can submit the application. You’re probably not going to get your final approval letter until probably closer to April because our technicians in our offices are busy trying to handle people that are filing for benefits for this month or next month or the following month. So you can submit it, but don’t expect to be seeing that letter come in the mail too soon.
Jason Parker: One other quick question, just kind of as interesting side note, I was with a client who was visiting the local social security office right here in Silverdale. When we walked in there together, I was surprised to see there was a guard and there was really thick, looked like bullet proof, glass. Is that normal for around the country, that our social security offices are these fortresses of security?
Kirk Larson: That’s a very good question. We do take very seriously the protection of all our clients that come to our office and we do take very seriously the protection of the employees in all of our offices. We do take these security measures. We do have guards there to go ahead and make sure everything remains orderly and not every office but many of our offices do have the protective glass to protect individuals. And unfortunately, I don’t know if it’s because of the world that we live in today, but there have been instances where we’ve had very agitated, confused, and angry people that have come into offices and have actually assaulted either members of the public or assaulted employees in an office. So that’s why many of the offices do take these protective measures.
Jason Parker: Okay. Back to socialsecurity.gov, the website. I know I set up an account, I think it’s a really great system. What are some of the other things people can do online? What do they have access to when they set that up?
Kirk Larson: Very good point. You can now go onto our website and not only can you file for monthly benefits on our website, but to find out what your future benefits are going to be, going to our website and setting up a My Social Security Account – that’s what it’s called, My Social Security Account – is a good way to do that.
By setting up one of these accounts, you can do many different things. I’ll first start with if you’re not on benefits yet. If you haven’t started your benefits yet, you can go online, set up one of these accounts, and then you could go ahead and look at what your future benefits are going to be. You can go online and you can see what your retirement benefits would be at sixty-two or at your full retirement age. Or if you waited and got bonus credits, if you waited all the way to age seventy, it would show you what your benefits would look like. It would also show you if you became disabled what you could qualify for or if you passed away what your surviving spouse or surviving children could get on your social security record.
Jason Parker: And as I … [crossover 10:44]
Kirk Larson: And also … [crossover 10:45] Oh, go ahead.
Jason Parker: I was just going to say, I understand too that those are in today’s dollars. You guys don’t take … On those estimates, they’re not including any future cost of living adjustments, are they?
Kirk Larson: That is correct. They are in today’s dollars. That’s a common question that we get. So if you’re age fifty and you’re looking at what you’re going to get at age sixty-two, we are saying that that isn’t in today’s dollars. That’s what you would get if you were sixty-two today. Very good point on that. We did not try to project what future cost of living increases would be.
Of course, by the time -if you’re age fifty – by the time you reached age sixty-two, that benefit would be higher because of the cost of living increases.
Jason Parker: Okay great.
Kirk Larson: You did bring up another interesting point that I like to point out to people when they’re looking at that though. That statement does make one very big assumption. Lets say you are age fifty and you’re looking at what you’re going to get at age sixty-two or age sixty-six. It’s assuming, when it says this is what you’re going to get, it’s assuming that you’re going to continue to work all the way to at least age sixty-two making what you’re making today.
If you’re age fifty and you’re making sixty thousand dollars, it’s assuming you’re going to work another twelve years making sixty thousand dollars a year. That’s how it comes up with that projection. If you were to stop work right there at age fifty or you were to change your work pattern, you went to part time work – went from making sixty thousand down to thirty thousand – then that estimate actually will change.
It’s making one big assumption when it’s telling you that. We do have another tool at our website called the Online Retirement Estimator that will actually allow you to run different scenarios to see what your future benefits might look like if you’re going to change your work pattern.
Jason Parker: Okay. Now … [crossover 12:42]
Kirk Larson: So you could actually go online and … oh, go ahead.
Jason Parker: Well I think that’s a great tool. But I wanted to ask you a little nuance question here regarding people who have been divorced and never remarried. Is there any way for them to get a feeling for what the benefit would be based on their ex-spouse’s earnings record by visiting the social security website?
Kirk Larson: In that situation, that is a question that we get. Unfortunately, you would not be able to get an idea of what the benefits would be on a divorced spouse. Divorced spouses or your current spouse for that matter have privacy rights. You do not have access to their records or the ability to get an idea of what you may qualify for on their record. So that is protected information.
Jason Parker: How do you – if you’re trying to do some planning for how much benefits you’re going to get, you’ve been divorced – is there any way for people to make estimates about what they think or they just have to wait and it’s like a cracker jack box? They get to see what the surprise is when they go in and file for benefits when they’re ready for retirement?
Kirk Larson: I always tell people that would ask that question number one, remember with spouse benefits generally it’s not going to give you that much money. So if your own benefits … I’ll say, if your spouse was an extremely high wage earner and over their working career they made over a hundred thousand dollars a year for almost every year that they worked, their maximum benefit is going to be somewhere around maybe twenty six hundred dollars per month. The most you can get off of their record would be about thirteen hundred dollars per month. If your own benefits are already going to be more than thirteen hundred dollars, it doesn’t really matter because you’re not going to get anything off of their record, off of your living spouse’s record because spouse’s benefits only gives you up to fifty percent.
If you spouse was less than a maximum wage earner, the benefit is going to be less than that. I always tell people, “Look at your own benefit.” If your own benefit is over thirteen hundred dollars at your full retirement age, generally you don’t need to worry about spouse’s benefits.
Jason Parker: Kirk, if somebody walks into the social security office and they’re trying to figure out – let’s say they’re a married couple – and they’re trying to figure out a good way for that married couple to coordinate their benefits between any spousal benefit that is available and then their own working benefit. Does the Social Security Administration give people advice on a good way to claim social security?
Kirk Larson: Very good question. We do not give people advice on what type of benefit to claim or how to maximize their particular benefits. Social security, when you go into an office, they will give you straight facts on what your choices are. If you came in we would say, “Hey you can file today and this is how much your benefit would be. Or you could file at sixty-two and this is how much your benefit would be. Or you could file at age sixty-six for example and this is how much your benefit would be.”
That’s basically all that our technicians are there to do. We’re not financial advisors. We’re not financial consultants. We don’t know all the other factors that contribute to you making that decision on when to take your social security benefits. That’s why we encourage people to go to financial advisors.
I do need to say even though I’m on your show today, we don’t endorse any particular financial advisors. What we do endorse is people going out and getting financial advice on how to maximize just not your social security benefits but how do social security benefits play into your overall retirement strategy. We do encourage people to go out and seek that information. We don’t endorse any particular avenue of getting that information, but social security people in our offices are not there to go ahead and provide that type of information. They simply provide the options. So if you were to go in …
Jason Parker: I was just wondering, because you guys have so much experience I’m sure you’re getting many of the same questions and concerns over and over again. What are some of the concerns, maybe the number one thing, that you would like to clarify for people out there? What’s that one question that the people at social security are consistently, constantly having to answer for people?
Kirk Larson: That’s something we’ve actually thought of and we’ve actually created what we call a frequently asked questions section at our website. These are probably about eighty percent of the most common questions that we get about retirement benefits, disability benefits, survivors benefits, Medicare coverage, different things like that.
Actually on our website, and I encourage people that this is actually a great way if you’re thinking about, if you want to understand social security benefits, if you knew very little about social security and you want to get a crash course, you could actually go to this frequently asked questions section and just type in the word “retirement”. It would bring up the top thirty-five questions that people have asked about retirement benefits. You could type in “divorced spouses” and it would give you the top twenty questions that people have asked about divorced spouses benefits. You could type in the word “work” and it’ll tell you how does work affect your benefits and so on.
It’s actually a great place to go. People that are new coming on to social security, I always recommend that you should go there, read those questions yourself, because these are the types of questions you’re going to get from people coming in.
Jason Parker: That’s great advice. We’ll put a link on the website to make it easier for people to find that back to the social security, but go ahead. The number one question …
Kirk Larson: The number one question that we get with people coming in, and it’s one that we really can’t answer because it’s more of a philosophical question: When should I file for my benefits? That’s probably the number one question that people come in and … It’s actually kind of a disappointing question. You would hope by the time people are getting close to their retirement age, they would’ve had a strategy that they’ve been working on for many years to understand when they should actually file for their benefits.
It’s not a question of, “What’s the technical aspect of this” but “How can I get the most out of my social security benefits?” It’s really not a question that we can answer. It actually turns right back around to you should seek some financial advice from financial advisors to help you understand what the implications are, just not taking your benefits but do you have enough to make it through retirement for the next twenty plus years? How does social security work into that strategy? It’s not a question that we can readily answer. We can certainly show you how to file, to actually get it for the technical purposes, but to give that philosophical idea of when should each individual file for the benefits is an individual choice.
Jason Parker: Kirk, we’ve got about four minutes here and I know we talked briefly before the show about Medicare and some of the things that happened there. Will you share with our listeners real quick some of those nuances?
Kirk Larson: Well and two things. We never answered the other half of our first question about the My Social Security account, that if you’re on benefits it’s also very important to have one of these accounts for My Social Security because you can directly interface with social security and you can do a number of different things. If you have a My Social Security account and you’re getting benefits, you can change your address, change your phone number, change your direct deposit right online. You can get a replacement Medicare card and now you can get a replacement social security card right online.
Jason Parker: Oh that’s great.
Kirk Larson: You can also get a benefit verification letter if you need to have something for a mortgage or a rental requirement confirming what your monthly payments are. You can do all that right online.
Jason Parker: That’s great.
Kirk Larson: Now turning around to your question about Medicare, where there’s a very unusual situation that happened this year with Medicare. Because the cost of living increase was zero, there’s a special clause in social security that says you cannot reduce a person’s social security check by increasing their Medicare Part B monthly premium, currently a hundred and four dollars and eighty cents. What it did say is that usually Medicare premiums do go up.
So we’re in a very unusual situation where we had to increase Medicare premiums because of the cost of the program but we couldn’t increase it for people already getting the social security benefits and receiving Medicare Part B. All those people that were receiving Medicare Part B last year and were getting monthly social security checks were paying a hundred and four dollars and I think it’s ninety cents, I take it back, it’s a hundred and four dollars and ninety cents, they are going to continue to pay that hundred and four dollars and ninety cents for twenty sixteen.
However, all new recipients coming in to file for Medicare this year, they’re going to be paying a different amount. They’re going to be paying a hundred and twenty-one dollars and eighty cents per month. If you were getting Medicare Part B and you weren’t getting a monthly check, then there’s no check to reduce because the premium is going up, so all of those people will also pay a hundred and twenty-one dollars and eighty cents. Normally about ninety seven percent of all people pay the same premium. Now we just happen to be in this unusual situation where we have two different classes of people paying for the same product at different rates.
Jason Parker: I think the important thing for people to know there too is that Congress finagled those numbers. That was going to be much higher than a hundred and twenty-one dollars but they came in and made some adjustments at the twelfth hour.
Kirk Larson: Yes they did. Congress actually had to pass a special regulation to adjust it. It was going to be closer to a hundred and sixty dollars a month for all those people filing brand new this year. Congress said … They stepped in, took the hit, and basically said, “We’re going to adjust the premium.”
Now I have to say, there is no such thing as a free lunch. That money had to come from some place. Truthfully, Congress had to borrow that money to go ahead and compensate Medicare for the extra money that it was not bringing in because while they said we’re going to give people a lower premium, that didn’t change the cost of the program. The program still remained the same cost and the money had to come from somewhere.
Jason Parker: Folks, I just want to remind you, you’ve been listening to episode eighty five on Sound Retirement Radio. You can listen to this program online at SoundRetirementPlanning.com. Kirk Larson, thank you again for being a guest on our program.
Kirk Larson: Thank you very much for having me. Look forward to coming back.
Jason Parker: Thanks. Take care, Kirk.
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