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When to Claim Social Security

The rules for claiming social security retirement benefits have become so complicated that it’s practically impossible for the typical near-retiree to navigate the system intelligently. Get this: The Social Security handbook has nearly 3,000 rules.

When to Claim Social Security: A Theme for Retirement Researchers
Tangled rules are keeping many people — especially couples — from getting the most out of the Social Security benefits they earned.

In recent years, researchers have shown that married couples can face several thousand possible when-to-claim combinations. Economists Katherine Carman and Angela A. Hung of the Rand Corporation created a survey on Social Security spousal and survivor benefits to learn more about these three issues:

  • Do people know when they are entitled to Social Security spousal benefits?
  • Do people know how spousal and survivors benefits are determined?
  • Do people know whether, and how, the timing of claiming Social Security impacts their spousal and survivors benefits?
Most survey respondents got the answers wrong. On average, they were only correct on 33 percent of questions about spousal benefits and 32 percent on survivor benefits. Nearly one in five (18 percent) wrongly believed that someone who never worked can’t claim benefits even if his or her spouse is entitled to Social Security.
Social Security: Financial Foundation for Retirees 
Results like these are disturbing because Social Security is the financial foundation of retirement incomes, replacing around 40 percent of pre-retirement income, on average. So even a few dollars more from Social Security monthly can really add up over time.

One Suggestion: Focus on Framing
Harvard University behavioral economist Brigitte Madrian called on the Retirement Research Consortium annual meeting audience of Social Security experts to devote greater energy on designing information to help people make smarter claiming decisions.

Many speakers at the conference expressed frustration that near-retirees frequently are unaware that their Social Security benefits would be bigger if they delayed claiming them. Fact is, Social Security benefits are more than 75 percent higher if you start filing at age 70 rather than the earliest age you can, 62.

Madrian suggested that one way financial advisers and online tools to make claiming decisions could combat the benefits complexity problem is by focusing on framing. For instance, a Social Security checklist for choosing when to claim benefits could begin with a statement: “Since people usually need more money to spend on medical bills as they get older, I’ll delay taking Social Security as long as possible.”

Sentences like that guide people toward later filing and plumped-up retirement benefits. By contrast, a checklist that opens with “I want to collect benefits as soon as possible because Social Security may run out of money soon,” encourages earlier claiming.

Read more on making smart social security claiming decisions.


Most People Claim Social Security Too Soon
Social Security Plans to Provide Even Less Information

Social Security Claiming Strategies for Widows and Widowers

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