Social Security Filing Concerns

[oldcomputerguy]

^ Just curious, did your approval letter's figure match what it showed on your SS statement? I've just filed for benefits at age 70, so I should be able to discern easily whether there's a discrepancy.

[22twain]

I filed for benefits at age 70. Application was in late October 2023 for benefits to start in January (payable in February).

2023-10-04 statement $3,557 (age 70 amount, before COLA announcement)
2023-12-05 statement $3,761 (age 70 amount, after COLA announcement)
2024-01-08 award letter $3,671 (before withholding for Medicare and income tax)

[stan1]

Login to your SSA account and make sure your earnings record is correct. If it is not correct, I'd start trying to fix it any way you can because it will take a long time.

This indeed can happen. My wife started her Social Security benefits at age 63. Before she did, I double-checked her earnings data. Turned out that a previous employer of hers had reported no earnings to SSA for her during her time with him. We had her old W-2's still on hand, so we were certain that the withholding had occurred, but he never turned it in. I got that corrected within a few weeks by writing to the SSA and providing copies of her W-2's.

My guess is very, very few people have W-2s for their entire earnings history over 40-50 years, but glad you were able to get it corrected quickly.

[Claudia Whitten]

The last time I tried to contact them, I was on hold for 6 hours. I finally got someone, and while I was explaining my problem, we got cut off and no way to reconnect.

I would love to have the peace of mind from an official ruling about approval and benefit amounts, though.

I might have gotten lucky. I called the number that was in the email I received after I applied online. That office didn't open till 9 a.m. EST. So I called at 8:58 and again at 8:59. Rang at 9:00 and about 10 seconds later someone answered.

[Claudia Whitten]

My guess is very, very few people have W-2s for their entire earnings history over 40-50 years, but glad you were able to get it corrected quickly.

Yeah. That's a scary story.

[neowiser]

I am a year past FRA.

So you're 68 now and made it this far.

Are you aware that for each year you wait after FRA, you collect 8% more because you will be collecting for fewer months. So you would now collect 8% more than when you turned 67. But if you wait until 70, you can collect 24% more!

Where else can you get a guaranteed deal like that? And it lasts as long as you live plus the annual COLA adjustment will be even more than if you had already started it!

Stay healthy and this discomfort will go away eventually.

The 8% guaranteed gain on return for waiting is often taken as gospel in SS discussions, but Mike Piper has a more nuanced view in his Open Social Security blog:
https://articles.opensocialsecurity.com/8-return/

With regard to delaying Social Security, we can calculate an expected return based on life expectancies. But that figure turns out to be nowhere near 8% in most cases. For an average unmarried male, the expected return from waiting to file for Social Security works out to about 1.8% above inflation. For an average unmarried female, it’s about 3% above inflation. For a married person, it depends on the difference in ages between the two spouses as well as the difference in primary insurance amounts. (In short, it’s usually significantly higher for the higher earner in the couple and lower for the lower earner in the couple.)

[catermick]

Login to your SSA account and make sure your earnings record is correct. If it is not correct, I'd start trying to fix it any way you can because it will take a long time.

This indeed can happen. My wife started her Social Security benefits at age 63. Before she did, I double-checked her earnings data. Turned out that a previous employer of hers had reported no earnings to SSA for her during her time with him. We had her old W-2's still on hand, so we were certain that the withholding had occurred, but he never turned it in. I got that corrected within a few weeks by writing to the SSA and providing copies of her W-2's.

Wow, when the question is asked "How long do I need to retain my tax records", this kind of situation is never mentioned. I just had 23 years of old returns shredded - but I still have the last 21 years. Those will be here till my children clean them out.

[celia]

So you're 68 now and made it this far.

Are you aware that for each year you wait after FRA, you collect 8% more because you will be collecting for fewer months. So you would now collect 8% more than when you turned 67. But if you wait until 70, you can collect 24% more!

Where else can you get a guaranteed deal like that? And it lasts as long as you live plus the annual COLA adjustment will be even more than if you had already started it!

Stay healthy and this discomfort will go away eventually.

The 8% guaranteed gain on return for waiting is often taken as gospel in SS discussions, but Mike Piper has a more nuanced view in his Open Social Security blog:
https://articles.opensocialsecurity.com/8-return/

I read that blog post and it makes no sense to me. He talks as if you are making a loan when SS is a monthly benefit. (In his example, you get the $100 amount PLUS the $8 instead of just the $8. No-one goes from $100 to $8, which is the 92% loss he references.)

Most discussions also talk about the lower amount if starting at 62 as a yearly decrease from the FRA benefit rather than an increase from ages 62 to FRA.

Besides that, the numbers are actuarily the same. You get more by waiting because you will be collecting for fewer months. Yes, you will die at some point but more likely after 70 than before age 70 unless you already have serious health issues.

And I can confirm that the 8% that we calculated showed up for DH and me when we started at age 70. (For our age group, FRA was at 66, so we received 32% more than the FRA amount.) And while waiting, the FRA age amount was adjusted upward each year to account for inflation during that time. That also increased our 32% amount each year.

Another large benefit was that we could finish our Roth conversions during these years we waited, especially since we knew that 85% of our SS would be taxed as ordinary income.


Note that if your only income in retirement is SS, it is not taxed as it is below the level of who needs to file.

[celia]

This indeed can happen. My wife started her Social Security benefits at age 63. Before she did, I double-checked her earnings data. Turned out that a previous employer of hers had reported no earnings to SSA for her during her time with him. We had her old W-2's still on hand, so we were certain that the withholding had occurred, but he never turned it in. I got that corrected within a few weeks by writing to the SSA and providing copies of her W-2's.

Wow, when the question is asked "How long do I need to retain my tax records", this kind of situation is never mentioned. I just had 23 years of old returns shredded - but I still have the last 21 years. Those will be here till my children clean them out.

You should be able to confirm that SS is receiving your contributions by requesting a statement from them each year (or each 2 or 3 years) that show your history of compensation and SS withholdings as well as your projected FRA benefit. It used to come automatically for us but now I think you need to request it. Save those instead. (Maybe you have to wait until you have earned 40 quarters before they send it.)

[Katietsu]

I started thinking more about social security claiming decisions over the last few years and we contemplated retirement. I have been surprised that no one seems to discuss what might happen in ten years. I do not expect it to be eliminated but I can see some variation of means testing or some reduction of the monthly amount. For those of us who will turn 70 about that time, it seems that just doing the math based on no changes to the way benefits are calculated and paid could have higher likelihood of being incorrect compared to the same analysis done by our parents.

To the OP, I do not think any decision that you would make is likely to make much of a difference. If you feel better starting now, that may be enough of a reason to go for it.

Discussion of potential changes to legislation/regulations aren’t allowed under forum policy, so why you are surprised? Assuming that by “no one” you mean Boglehead posters.

Right. I guess I may not have a clear picture of what happens if there are no legislative changes. Without legislation, assuming the numbers are as projected, will there be a reduction in benefits in about a decade?

[22twain]

I guess I may not have a clear picture of what happens if there are no legislative changes. Without legislation, assuming the numbers are as projected, will there be a reduction in benefits in about a decade?

As I understand it, current law does not specify what happens if the SS trust fund is depleted and the incoming flow of payroll taxes is insufficient to pay the benefits that are specified by law. We will be in uncharted territory if that happens.

[Mayacallie]

Worse case right now is social security offices closing and fewer employees, so you’re looking at worse customer service. We’re still years away from dealing with the shortfall.

Already happening. My local office used to be “ take a number “. Wait was usually an hour, and then a very knowledgeable, amicable representative. Was in three weeks ago, and the security officer said only by appointment now. Call the number. But no one answers the number. No one was visible in the office.

[marielake]

Who knows with any certainty what will happen with Medicare in the near future. We do know that at some point in next few years benefits will be reduced and eventually, if no changes made, they will run out of funds in my life time.

I planned to wait till 70, but when I looked at numbers it didn't make much difference in the long run. Decided to take SS at 66 and buy a second home with the add'l income. Very happy with my decision.

[Kosh976]

Worse case right now is social security offices closing and fewer employees, so you’re looking at worse customer service. We’re still years away from dealing with the shortfall.

Already happening. My local office used to be “ take a number “. Wait was usually an hour, and then a very knowledgeable, amicable representative. Was in three weeks ago, and the security officer said only by appointment now. Call the number. But no one answers the number. No one was visible in the office.

I read recently in an LA Times opinion piece (so I'd assume some bias there) that 16 years ago (2009) there used to be 67,000 Social Security employees and about 54.3M SS people receiving some benefit. 2024 FACTS available at SSA.gov state there are now 68.4M beneficiaries and a recent SSA press release says they just set a staffing target of 50K, meaning a 7000 employee reduction from the current staffing of about 57,000.

Servicing 26% more beneficiaries w/ 25% fewer employees just as peak boomer retirement hits doesn't sound like a winning formula to me.

Opensocialsecurity has my 62.5 and 70 claiming dates at a virtual tie (~$2000 delta on a $1M total) without the projected 23% cut, and a recommends claiming now if I factor in the 23% cut, showing a $36K reduction if I wait to claim at 70.

I've always felt waiting until 70 was worth it for longevity insurance, and I've already built a TIPS bridge.

But, I expect things will get ugly at SSA sooner rather than later. $36K isn't going to change my retirement one way or the other, but as McDougal alluded to above, it would be nice not to have to ask my wife for an allowance. Claiming now would do that.

Something significant WILL happen in the next 8 years, we just don't know what it is.

[Sandwich]

I am a year past FRA. I had planned to wait until 70 to file for benefits, however, in light of the current climate, I feel it may be more prudent to file now. My husband is turning 70 and filed. Any thoughts? Is anyone else feeling uncomfortable?

My recent online filing process experience -

1. Applied online ... I recall having to use an Id.me password
2. The next day, I received an email response informing me that the online application was referred to a SSA office in California ... a considerable distance from my home. The email did not ask for any further information. (I never interacted with SSA staffer either in person or on the phone.)
3. Two weeks later, I received a "Benefit Verification Letter" indicating the benefit amount and a notice of award letter indicating the approximate date of the first benefit payment.
4. Months later, the first benefit payment was made via direct deposit.

YMMV ... steps 1 - 3 were done prior to all the government disruptions.

[ObliviousInvestor]

The 8% guaranteed gain on return for waiting is often taken as gospel in SS discussions, but Mike Piper has a more nuanced view in his Open Social Security blog:
https://articles.opensocialsecurity.com/8-return/

I read that blog post and it makes no sense to me. He talks as if you are making a loan when SS is a monthly benefit. (In his example, you get the $100 amount PLUS the $8 instead of just the $8. No-one goes from $100 to $8, which is the 92% loss he references.)

The point of the loan example was simply to illustrate the concept that in order to calculate a rate of return, we need to know how long the various cash flows last.

In a rate of return calculation with respect to the Social Security filing decision, the cash outflow is the opportunity cost (forgone benefits), and the cash inflow is the increase that results from waiting.

For an annuity, the only way for the rate of return to be equal to the annual payment would be for the annual payment to last forever. (And of course for any annuity that is based on a person's life, or multiple person's lives, the payment will not last forever.)

[HighLonesome]

I would try to avoid complex situations people sometimes suggest such as "file and suspend" but I think others will continue to take that risk.

I think "file and suspend" has not been available since April 30, 2016.

I suspended my S/S after 3 payments in February 2025. It still exists.

[Dottie57]

So you're 68 now and made it this far.

Are you aware that for each year you wait after FRA, you collect 8% more because you will be collecting for fewer months. So you would now collect 8% more than when you turned 67.

But if you die, 8 percent of nothing is nothing.

But you won’t be needing it either.

[HighLonesome]

Worse case right now is social security offices closing and fewer employees, so you’re looking at worse customer service. We’re still years away from dealing with the shortfall.

Already happening. My local office used to be “ take a number “. Wait was usually an hour, and then a very knowledgeable, amicable representative. Was in three weeks ago, and the security officer said only by appointment now. Call the number. But no one answers the number. No one was visible in the office.

This is not new, despite what you might be reading. My local S/S office has been appointment only since covid. When I inquired about the status of my S/S suspension, I was lucky enough to get a supervisor that did it immediately, he explained his subordinate while competent, would take too long to process. Dont buy into the hype, S/S will operate more smoothy.

[tibbitts]

Already happening. My local office used to be “ take a number “. Wait was usually an hour, and then a very knowledgeable, amicable representative. Was in three weeks ago, and the security officer said only by appointment now. Call the number. But no one answers the number. No one was visible in the office.

This is not new, despite what you might be reading. My local S/S office has been appointment only since covid. When I inquired about the status of my S/S suspension, I was lucky enough to get a supervisor that did it immediately, he explained his subordinate while competent, would take too long to process. Dont buy into the hype, S/S will operate more smoothy.

My post-COVID experience has also been that there are only certain functions for which you can make an in-person appointment.

Presumably we're in some sort of intermediate stage on the way to fully automated claiming, where there won't be any advantage or need for human intervention (remotely or in-person) unless something goes wrong.

[sgr000]

One tip....

The last time I tried to contact them, I was on hold for 6 hours. I finally got someone, and while I was explaining my problem, we got cut off and no way to reconnect....

Today I got a notice that my application status had changed. Checking online, it seems they did the right thing: approved me, for the right amount, and said to wait another 10 days for the letter. So far, so good.

My spouse got a similar notice, BUT: they had approved her for benefit on her own record, NOT the 3x larger spousal benefit for which she applied.

So I tried to call them (the web site has no contact email, no way to submit a contact form, only phone). The web page carefully explains our local office is only a couple miles away, but (a) I can't just walk in without an appointment, and (b) appointments are only via the national number. So we called the national number, which asked us a bunch of questions.

When it tried to transfer us to an agent, it said they were having technical difficulties, told us to call again, and hung up.

This happened twice in a row.

Grrr.

Now I'm kind of at wit's end: no way to talk to anybody, no way to send an email, no way to do anything about it.

[bynomial]

Now I'm kind of at wit's end: no way to talk to anybody, no way to send an email, no way to do anything about it.

You can call your representative or senator. They have staff to help with these sorts of things

[sgr000]

Now I'm kind of at wit's end: no way to talk to anybody, no way to send an email, no way to do anything about it.

You can call your representative or senator. They have staff to help with these sorts of things

Thanks, that's a good thought. I hadn't considered the "nuclear option", but it's getting close to that.

[Chip Munk]

My spouse got a similar notice, BUT: they had approved her for benefit on her own record, NOT the 3x larger spousal benefit for which she applied.

If your spouse qualifies for a benefit on her own employment record, she will receive that benefit and an "add on" spousal benefit to bring the total up to a maximum of 50% of your Primary Insurance Amount depending on her claiming age. I recall others posting here that they were first notified about the spouse's own benefit and then soon after received a notice about the spousal benefit.

[diy60]

So I tried to call them (the web site has no contact email, no way to submit a contact form, only phone). The web page carefully explains our local office is only a couple miles away, but (a) I can't just walk in without an appointment, and (b) appointments are only via the national number. So we called the national number, which asked us a bunch of questions.

Assuming you live in a metro area, do you have the means to drive to a much more rural office? I've driven about 45 mins to a very rural and somewhat poor region of the State and have rec'd excellent service. The local office closest to my home is a disgrace. I don't know if all offices are on appointment only but perhaps something to try. Good luck.

[Padlin]

I think "file and suspend" has not been available since April 30, 2016.

I suspended my S/S after 3 payments in February 2025. It still exists.

From SSA’s site.

You can still voluntarily suspend benefit payments at your full retirement age to earn higher benefits for delaying.
During a voluntary suspension, other benefits payable on your record, such as benefits to your spouse, are also suspended.
If you have suspended your benefits, you cannot continue receiving other benefits (such as spousal benefits) on another person’s record.

[catermick]

So I tried to call them (the web site has no contact email, no way to submit a contact form, only phone). The web page carefully explains our local office is only a couple miles away, but (a) I can't just walk in without an appointment, and (b) appointments are only via the national number. So we called the national number, which asked us a bunch of questions.

Assuming you live in a metro area, do you have the means to drive to a much more rural office? I've driven about 45 mins to a very rural and somewhat poor region of the State and have rec'd excellent service. The local office closest to my home is a disgrace. I don't know if all offices are on appointment only but perhaps something to try. Good luck.

We did that, nice "country" setting, parking was perfect, no appointment, got to see somebody within 1/2 hour and they promptly asked us why did we come there? It wasn't our assigned office, they have to send the paperwork to our assigned office, etc, etc... So we just left.

Funny thing is, I had done that exact same thing a few times before without any issue. And - months before - I had seen that same person.

So next day took the bus to downtown Portland, went through the metal scanner (not at the rural location and I also forgot to take off my belt so I got a thorough pat down), no appointment, waited an hour or so and the person that helped us told us what we thought we needed to do we didn't - which the rural office did not know. Looked everything over - spousal benefit - took care of an item that was holding up the process which the rural location also didn't inform us about - and we got our back dated payment a few weeks later.

So you may or may not be able to do what you want to do by going to a different office. I think it depends on what the issue is and possibly who you see on that given day.

[celia]

My post-COVID experience has also been that there are only certain functions for which you can make an in-person appointment.

Presumably we're in some sort of intermediate stage on the way to fully automated claiming, where there won't be any advantage or need for human intervention (remotely or in-person) unless something goes wrong.

This was true for us, PRE-Covid too. It was also during the time one spouse could file and suspend until 70, just so that the other one could start receiving half of it. Then the second person started collecting on their own work history at age 70.

With that option now gone and most new filers having a FRA of 67 (instead of 66.x), things are slowly getting simpler inside SS.

Although, we now hear about all the recipients over 110 who are still collecting. Those cases might have to be investigated one at a time, possibly with fraud penalties (or fixing database errors).

[celia]

The point of the loan example was simply to illustrate the concept that in order to calculate a rate of return, we need to know how long the various cash flows last.

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

And the extra amount is not a "rate of return". The whole monthly benefit is one number once you start it up. It is designed to be actuarially neutral in that you will have received the same amount of money either way at about 88. Starting at age 66 or 67 at a lower monthly benefit up to age 88 comes out close to starting at 70 with a higher benefit up to age 88.

So, if you expect to die before age 88, start it up early. And if you think you will live past 88, wait to 70 since you may need the extra money then.

[sgr000]

My spouse got a similar notice, BUT: they had approved her for benefit on her own record, NOT the 3x larger spousal benefit for which she applied.

If your spouse qualifies for a benefit on her own employment record, she will receive that benefit and an "add on" spousal benefit to bring the total up to a maximum of 50% of your Primary Insurance Amount depending on her claiming age. I recall others posting here that they were first notified about the spouse's own benefit and then soon after received a notice about the spousal benefit.

Thanks, that's hopeful news and good to know.

Tried calling today:

• Got disconnected immediately when it tried to connect me to an agent the first 3 times, made me start all over.
• The 4th time, we got through after 90min. When the agent put us on hold to "look something up", we got disconnected. Again.
• Now waiting for a callback on the 5th attempt today.

I hope it's something like what you outlined!

[ObliviousInvestor]

The point of the loan example was simply to illustrate the concept that in order to calculate a rate of return, we need to know how long the various cash flows last.

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

And the extra amount is not a "rate of return". The whole monthly benefit is one number once you start it up. It is designed to be actuarially neutral in that you will have received the same amount of money either way at about 88. Starting at age 66 or 67 at a lower monthly benefit up to age 88 comes out close to starting at 70 with a higher benefit up to age 88.

If your assertion is that the 8% figure is a rate of return, presumably we could calculate that, yes? That is, we could do some rate of return calculation (e.g., RATE, IRR, XIRR in Excel) that would yield that 8% figure, right?

If so, what cash flows are you assuming, that result in an 8% rate of return? Said differently, what inputs would you provide to one of those functions (or some other calculator) that would result in an 8% rate of return?

As a separate point, one should not take it as a given that Social Security is actuarially neutral. It's only designed to be that way for single people, when life expectancies and interest rates are similar to those baked into the benefit calculations (or different in ways that balance each other out).

[sgr000]

If your spouse qualifies for a benefit on her own employment record, she will receive that benefit and an "add on" spousal benefit to bring the total up to a maximum of 50% of your Primary Insurance Amount depending on her claiming age. ...

Thanks, that's hopeful news and good to know.

Tried calling today:

• Got disconnected immediately when it tried to connect me to an agent the first 3 times, made me start all over.
• The 4th time, we got through after 90min. When the agent put us on hold to "look something up", we got disconnected. Again.
• Now waiting for a callback on the 5th attempt today.

I hope it's something like what you outlined!

Finally got through to an agent, who was very courteous and efficient.

He said spousal benefits cannot be applied for over the web, but instead require an interview and possibly documentation. He acknowledged that it does not say this anywhere on the web site, or on the retirement application. The fact that we wrote in the comments section of the form that we were applying for spousal benefits didn't matter, since "the computer doesn't read that".

So now we have a phone interview appointment in April to get spousal benefits started. It's complicated by the factor that my spouse will be in Japan at the time, so we're probably talking about an international conference call. Fortunately, the spousal benefits, if approved, will be retroactive for up to some large number of months. So we're not losing anything, just being stressed.

This is way more complicated than I thought it would be!

[Chip Munk]

That's very interesting. My husband applied for spousal benefits online on the same day I applied online for my benefit. We each received a letter asking us to set up a phone interview. We were able to schedule a joint interview. The SSA rep just reviewed and confirmed the information we supplied on our online applications. It was during the pandemic so maybe things were different then.

ETA: The answer you got from the SSA rep also seems to contradict the notion of "deemed filing" described here https://www.ssa.gov/benefits/retirement ... iming.html as:

Deemed filing means that when you file for either your retirement or your spouse’s benefit, you are required or “deemed” to file for the other benefit as well.

Your wife's application for her own benefit has been approved, so other than perhaps needing to provide some documentation (a marriage certificate for example) I would have thought she has already filed for her spousal benefit due to "deemed filing".

And this SSA webpage: https://www.ssa.gov/forms/ssa-2.html states that you can file for spousal benefits online.

[ssel]

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

Another way to look at it:

If you wait 1 year after FRA, your payment increases by 8% (100→108 is an increase of 8%).
If you wait 2 years, your payment increases another 7.4% (108→116 is an increase of 7.4%).
If you wait 3 years, your payment increases another 6.9% (116→124 is an increase of 6.9%).

[ObliviousInvestor]

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

Another way to look at it:

If you wait 1 year after FRA, your payment increases by 8% (100→108 is an increase of 8%).
If you wait 2 years, your payment increases another 7.4% (108→116 is an increase of 7.4%).
If you wait 3 years, your payment increases another 6.9% (116→124 is an increase of 6.9%).

This is correct. But it's still critical to understand that these are not rates of return (i.e., it would not be a meaningful comparison to compare them to the yield on bonds for example).

[ondarvr]

Another way to look at it:

If you wait 1 year after FRA, your payment increases by 8% (100→108 is an increase of 8%).
If you wait 2 years, your payment increases another 7.4% (108→116 is an increase of 7.4%).
If you wait 3 years, your payment increases another 6.9% (116→124 is an increase of 6.9%).

This is correct. But it's still critical to understand that these are not rates of return (i.e., it would not be a meaningful comparison to compare them to the yield on bonds for example).

And these increases are even higher once the cost of living increases are factored in. In my last two years before 70 there is $25 increase per month that I wait, so waiting the two additional years increases my monthly check at 70 by $600 per month before the cost of living increase.

[celia]

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

Another way to look at it:

If you wait 1 year after FRA, your payment increases by 8% (100→108 is an increase of 8%).
If you wait 2 years, your payment increases another 7.4% (108→116 is an increase of 7.4%).
If you wait 3 years, your payment increases another 6.9% (116→124 is an increase of 6.9%).

This is wrong because you don't get 3 cumulative years of increases. You get all the increases in the year you start based on how many years you delayed. So, use "100" in place of the red numbers. Then your increases will end up as 8, 16, and 24 per cent.

[celia]

You don't need to calculate a rate of return since it is a known input (ie, 8% for each year you wait after you reach FRA).

And the extra amount is not a "rate of return". The whole monthly benefit is one number once you start it up. It is designed to be actuarially neutral in that you will have received the same amount of money either way at about 88. Starting at age 66 or 67 at a lower monthly benefit up to age 88 comes out close to starting at 70 with a higher benefit up to age 88.

If your assertion is that the 8% figure is a rate of return, presumably we could calculate that, yes? That is, we could do some rate of return calculation (e.g., RATE, IRR, XIRR in Excel) that would yield that 8% figure, right?

If so, what cash flows are you assuming, that result in an 8% rate of return? Said differently, what inputs would you provide to one of those functions (or some other calculator) that would result in an 8% rate of return?

As a separate point, one should not take it as a given that Social Security is actuarially neutral. It's only designed to be that way for single people, when life expectancies and interest rates are similar to those baked into the benefit calculations (or different in ways that balance each other out).

No! I don't know why you keep referring to "rate of return". Return of what? All the withheld SS payments I made over my working years? Those numbers were already factored into the calculation of my FRA amount.

I don't know what you mean. You make it sound like SS is an investment, but it isn't. It acts like an annuity in that it ends when I do but my cost to get it is not easily calculable. I can get a different amount by deciding how many years I want to spread it over. (Choosing an earlier start will give me less each month while starting at the last available year will give me more.) To me, it is just a benefit that I'm entitled to receive. The only option I have is when to start it.

[ssel]

Another way to look at it:

If you wait 1 year after FRA, your payment increases by 8% (100→108 is an increase of 8%).
If you wait 2 years, your payment increases another 7.4% (108→116 is an increase of 7.4%).
If you wait 3 years, your payment increases another 6.9% (116→124 is an increase of 6.9%).

This is wrong because you don't get 3 cumulative years of increases. You get all the increases in the year you start based on how many years you delayed. So, use "100" in place of the red numbers. Then your increases will end up as 8, 16, and 24 per cent.

You're not wrong to note that your payments by delaying 2 years would be 116% PIA, as I do indicate above. I was just suggesting a different way of looking at the same numbers. In a very real sense the "value" of that second year of waiting is lower than the value of the first, percentage-wise.

After I said that by waiting 1 year your payment increases 8%, I then pointed out that by waiting another year your payment would go up by another 7.4%. Let me explain:

Suppose you've waited that first year and today you are age FRA+1, and you're deciding whether to continue waiting. If you file immediately you'll get payments of 108% PIA. If you wait one more year you'll get payments that are 7.4% higher than this. Sitting here today, on or near your 68th birthday, this 7.4% number seems more meaningful in terms of deciding whether or not to wait another year.

And of course as Mike points out, the true rate of return to use in making such decisions would factor in several other things. I'm not discussing that part -- I'll use Mike's tool for that. I'm just trying to point out something more basic that people tend to overlook.

[ObliviousInvestor]

If your assertion is that the 8% figure is a rate of return, presumably we could calculate that, yes? That is, we could do some rate of return calculation (e.g., RATE, IRR, XIRR in Excel) that would yield that 8% figure, right?

If so, what cash flows are you assuming, that result in an 8% rate of return? Said differently, what inputs would you provide to one of those functions (or some other calculator) that would result in an 8% rate of return?

As a separate point, one should not take it as a given that Social Security is actuarially neutral. It's only designed to be that way for single people, when life expectancies and interest rates are similar to those baked into the benefit calculations (or different in ways that balance each other out).

No! I don't know why you keep referring to "rate of return". Return of what? All the withheld SS payments I made over my working years? Those numbers were already factored into the calculation of my FRA amount.

I don't know what you mean. You make it sound like SS is an investment, but it isn't. It acts like an annuity in that it ends when I do but my cost to get it is not easily calculable. I can get a different amount by deciding how many years I want to spread it over. (Choosing an earlier start will give me less each month while starting at the last available year will give me more.) To me, it is just a benefit that I'm entitled to receive. The only option I have is when to start it.

I agree with you that "rate of return on taxes paid" would not really be helpful for making a decision about when to file for benefits. That is not what I am talking about here.

I am talking about the rate of return (or, when forward looking, expected rate of return) from forgone benefits if you choose to delay.

For instance, imagine that I am single, I am exactly at my full retirement age, and I have a primary insurance amount of $1,000. If I choose to delay exactly one month and then file:
1) I have given up $1,000 that I could have already received (i.e, one month of benefits), and
2) My monthly benefit now will be $6 dollars higher than it would have been if I had not waited that one month. ($6.67, before rounding down.)

As you note, this is an annuity. I have essentially paid a $1,000 premium for a $6/month lifetime annuity. And so another way to frame the question of "should I file immediately or should I wait another month" is to ask, do I want to buy that annuity?

If we knew how long the annuity would last (i.e., how long I would live) we could calculate a rate of return. Of course, we don't know that in advance. But we can use mortality assumptions of a person's choosing to calculate an expected rate of return.

Calculating an expected rate of return allows us to compare to other potential investment options (e.g., what if I had not waited that month, had collected that $1,000 and invested it in something else).

This is not the only relevant consideration in a "when to file for benefits" analysis, but it is informative.

For instance, for an unmarried female in "average" health as represented by the SSA's most recent period life table, the expected rate of return from delaying Social Security from 62 all the way until 70 would be ~2.7%. And for an unmarried male in "average" health as represented by the SSA's most recent period life table, it would be ~1.3%. (Note that these are inflation-adjusted expected returns rather than nominal.)

Back when TIPS yields were negative, these expected returns looked very attractive. Now they look acceptable but not amazing. If TIPS were yielding 4%, the expected returns from delaying Social Security (for an unmarried person in average health) wouldn't look very good.

If we say that delaying Social Security provides an 8% real return, we dramatically overstate the case. The expected real return will always be well below 8%, unless we expect the person to live forever.

For married people, the expected rate of return calculation is more complicated due to the way survivor benefits work. It would depend on the difference in earnings history as well as age.

And again, I don't mean to suggest that the expected return from delaying benefits is the only relevant consideration. As you have noted on a variety of threads, we also want to consider tax planning, which more often than not is a point in favor of delaying benefits. And we want to consider longevity risk as well, which is also a point in favor of delaying benefits.

[PeterA007]

But if you die, 8 percent of nothing is nothing.

But you won’t be needing it either.

Of course. Which means you should have been taking it. That's the point.

[Dottie57]

But you won’t be needing it either.

Of course. Which means you should have been taking it. That's the point.

My goal/point is not to make sure I get money from SS - if I die now I don’t care that I received 0 from SS. I DO WANT TO ENSURE I have adequate money as I age. A bigger cash flow later in life is my goal.

[Hebell]

I know this is hard to believe, but when I started my social security, there was a delay. They did not believe that I worked from three different payroll centers from general electric across the country in 1984 and 1985. They actually put my claim on hold. I called them and told them that I was a research graduate fellow, and that I was being paid from three payroll centers. They lifted the hold. And, I still have the paychecks! I have every paycheck I ever earned.

[ondarvr]

Of course. Which means you should have been taking it. That's the point.

My goal/point is not to make sure I get money from SS - if I die now I don’t care that I received 0 from SS. I DO WANT TO ENSURE I have adequate money as I age. A bigger cash flow later in life is my goal.

This is my plan also. I have enough money while I'm working and I rather enjoy my job, so while maxing out retirement accounts I'm also increasing SS to the point where I can live off of it without tapping into savings unless there's an emergency or something out of the ordinary that I want to do. Taxes would have reduced the value of taking SS earlier, both while working and in retirement.

If I die before I take SS then it means my wife collects more, but we aren't missing out on anything by not taking it earlier.

[ScubaHogg]

I’d do whatever opensocialsecurity.com told me too. I’d also claim that anyone saying “money now is better than money later” has some very fundamental misunderstandings of time value of money, longevity insurance, and total portfolio concepts.

I certainly wouldn’t change my behavior over “the current climate.” Social security will likely be the last thing anyone ever changes. If you think about it some you can see why

Edit: I see Mike Piper commented (Obliviousinvestor). He is the expert. You should probably just listen to him

[Padlin]

I don’t know anyone who doesn’t hang out here that’s waited till 70. My brother who’s closing in on 80 is kicking himself for starting at 62. Figured he’d never make it out of his 60’s.

[rgs92]

So in a straightforward online SSA application based solely on one's own work record as reported by SSA with no other complications, is that handled pretty much as an automated process so that little or no human intervention is needed by SSA?

(To clarify, nothing spousal/survivor/SSI/disability/suspension or anything else like that involved.)
Thanks.

[HighLonesome]

I suspended my S/S after 3 payments in February 2025. It still exists.

From SSA’s site.

You can still voluntarily suspend benefit payments at your full retirement age to earn higher benefits for delaying.
During a voluntary suspension, other benefits payable on your record, such as benefits to your spouse, are also suspended.
If you have suspended your benefits, you cannot continue receiving other benefits (such as spousal benefits) on another person’s record.

Thanks for confirming my post.

[stlrick]

I understand the concern that the rules of the game may change unexpectedly and quickly, and that one might be better off to be a member of the group already receiving benefits than in the group not yet receiving benefits. Given that the financial consequences are relatively small in the long run, I would prioritize peace of mind. That appears to be in favor of filing now. Go ahead.

[chillwill]

If you're worried about uncertainty, filing at age 70 is for a large COLA adjusted, safe and tax-advantaged revenue stream is one of the best actions you can do. Even in the worst-case scenario of a partial reduction on Social Security funding, you are most likely grandfathered into the current benefit. Stay the course, you're almost there!