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Navigating the Confusing Rules of When to Claim Social Security

Why the system is so complex and how to make the right decisions

By Chris Farrell

On the bookshelf by my desk at work is Get What’s Yours: The Secrets to Maxing Out Your Social Security by Philp Moeller, Laurence J. Kotlikoff and Paul Solman. The 324 (!)-page book by a financial writer, an economist and the PBS NewsHour economics correspondent delivers on its promise to help people figure out the best strategy for when to claim Social Security. No criticism of the authors intended, but their book highlights a major problem with Social Security: It’s too complex!

Social Security
Credit: Adobe Stock

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

Social Security’s complexity was a key theme of the Retirement Research Consortium annual meeting I attended in Washington D.C. last month. The concern at the conference was that the 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.

Let me tell you about the results from the paper presented at the conference, “Social Security Household Benefits: Measuring Program Knowledge.” 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.

“Overall, knowledge of spousal and survivor benefits is low,” Carman said. “The policy implication is that couples may not be planning optimally for retirement.”

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.

How did we get here? And are we stuck in this morass forever?

Social Security’s current complexity isn’t by some nefarious design. It’s a function of frequent modifications since President Franklin Roosevelt signed Social Security into law in 1935. Many of the changes have actually been geared toward making benefits fairer and more equitable.

“Complexity has a cost,” says Laith Alattar, social science research analyst with the Social Security Administration. “Maybe we should think over the next 20 years when we reform Social Security: Do we need all the complexity?”

Social Security Staffers Are Shorthanded

Sad to say, potential claimants can’t rely on the Social Security Administration for guidance. The agency is terribly short-staffed and maddeningly overwhelmed.

Since 2010, the Social Security Administration’s core operating budget has been cut by 9 percent, adjusting for inflation, according to Kathleen Romig, senior policy analyst of the Center for Budget and Policy Priorities. Those budget cuts translate into a 12 percent reduction in staff, closed field offices and shortened office hours. Little surprise, then, that callers to Social Security often don’t get answers to their questions. (Note to Congress: The ranks of people eligible to file for Social Security is rising. Cutting into Social Security’s budget makes no sense.)

One Suggestion: Focus on Framing


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

“Choice architecture is a tool,” she said. “Plan design can influence 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.

How to Make Smart Social Security Claiming Decisions

In the meantime, what should you do when you want start investigating your Social Security options?

Fortunately, there are plenty of helpful resources to tap. Among them: the Social Security Claiming Guide Center pamphlet by the Center for Retirement Research at Boston College. It covers the basics clearly and well. For a deeper dive, pick up a copy of Get What’s Yours.

Financial advisers traditionally haven’t spent much time learning the nuances of Social Security, but that’s changing. For example, the advisory services at financial services behemoths Vanguard and Schwab now include Social Security claiming strategies among their financial planning benefits for clients.

Perhaps most valuable are the increasingly sophisticated online Social Security calculators. Free ones like those from AARP and mutual fund company T. Rowe Price are useful for starting to explore benefits.

However, for near-retirees facing additional options — married couples, divorced people, widows and widowers — the more comprehensive calculators that charge a fee are worth investigating. Among the better programs, I think: Maximize My Social Security, Social Security Solutions and Social Security Advisors.

They won’t make your claiming decision simple, but at least they’ll help you make the right one.

Photograph of Chris Farrell
Chris Farrell is senior economics contributor for American Public Media's Marketplace. An award-winning journalist, he is author of the books "Purpose and a Paycheck:  Finding Meaning, Money and Happiness in the Second Half of Life" and "Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life." Read More
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