Answering Michael's question from San Diego.
He's like, "Hey, I'm 69 years of age, I filed and froze my Social Security account in 2016"
when he was 66.
So now three years later he's 69.
The amount was t$2,550 a month.
He was born in April of 1950.
"I know I made the deadline before the rules change because--" Michael is correct.
A few years ago, you can no longer file and suspend your benefits depending on your age.
For most of you, it's already past the deadline.
There's only a small - if you're born before 1950 and you still haven't claimed your Social
Security benefits I would highly seek financial planning advice because you're probably leaving
some money on the table.
So "SSC" - that should be Social Security - SSA but SSC is what Michael's calling the
Social Security Administration.
Social SeCurity.
Social Security Company "knows to start payments when I turn 70 YOA.
How do I get paid back retroactively all payments at 70 to 66 years of age and take the lower
payment amount?
Call them?"
So here's what Michael's wanting to do.
And I hope this is not the case but this is usually what happens is that you can file
and suspend your benefit.
So at 66, at his full retirement age, he went to the Social Security Administration, filed
his benefits, but then he suspended them and let his benefit continue to grow.
So from age 66 to age 70, he would get an 8% delayed retirement credit, so by age 70
he would roughly get 132% higher benefit.
So now he's at that 70-year mark and so he's like, "OK well now it's time to turn on my
benefits," and let's say his benefit it was $1,000 a month, at age 70 it would be what
$1,300 give or take a couple bucks.
Correct.
$1320.
So what he's wanting to do is not take the $1,320 a month.
He wants to take the $1,000 a month
that he would have received over the last four years
That he would have received and then continue with the lower payment.
But he wants to get a lump sum payment from Social Security of that.
So you could do this, you could say, "hey you know what, I was just kidding.
Give me all the money that I would have received because I didn't claim any monies.
I delayed my benefit to age 70," and now something happened in life where he's either have a
shortened life expectancy where he's like, "I need to get as much money out of this thing
as possible," because that's the only real reason why you would want to do this.
Or maybe he wants a little bit of a lump sum.
So you can retroactively go back to Social Security Administration and say, "you know
what, I filed for my benefit and I suspended them because I thought I wanted to take the
higher benefit at age 70.
Nah, life's changed.
Let me go back."
Then from there, retroactively from 70 on, he would get the lower benefit, but he would
get a lump sum payment of all the payments that he missed.
And he would have had to have done this file and suspend prior to April 30th, 2016 to be
able to do this option according to Larry Kotlikoff.
I just checked.
Yeah.
You had to do this, file before the red the deadline.
Because this is no longer the case - you can't get the lump sum anymore.
That's right.
In fact, if you were to file and suspend now, which you can do, then there's no retroactive
benefit possible.
You can't necessarily file and suspend - Mary Beth yelled at me.
According to Larry Kotlikoff, he says, "for people who voluntarily suspended their benefits
prior to 4/30/2016, the answer is yes, they can get the lump sum.
But the answer is no for people who suspend their benefits on or after April 30th" That's
according to Larry.
So I guess the file and suspend terminology is really for - the only reason why you would
file your benefit and suspend the benefit is to trigger a spousal benefit.
Because why would you even go through the hassle of filing your benefit and letting
the stuff grow?
Because the spouse can only claim the spousal benefit if the other spouse had filed for
a benefit.
Today let's say I could file my benefit, I'm receiving my benefit, I can suspend the benefit.
And what happens then is that my benefit would continue to increase.
So let's say I took it at age 62, I received a lower benefit, and then maybe I go back
to work, and then at 64, it's like, "well I don't need the benefit.
I can suspend the benefit," and then the Social Security Administration will continue to increase
my benefit over time.
So let's say now I turn it on at age 70, I would probably get, I don't know, throwing
a dart here, probably about 40% more benefit give or take a couple bucks?
Don't quote me on that?
But I can do that.
But let's say if I was married, even though I filed for my benefit but I suspended them,
while my benefits are suspended my spouse could not claim a spousal benefit.
If she was claiming the spousal benefit and I suspended my benefit, her spousal benefits
would go away.
No, I agree with that.
But if you were claiming your own benefit and then you realized, "you know what, I don't
really need it," I could suspend at this point.
And if you do that after April 30th of 2016, you can no longer do the lump sum option.
I think that's the point.
So Michael, yes.
If that were the case, if you want to take the lower payment and receive the lump sum,
you could call them or you could just go to your local Social Security Administration,
and I would highly suggest bringing a cell phone that has a podcast app on it that you
can listen to Your Money, Your Wealth® for about four or five hours while you're sitting
in the Social Security Administration.
And then when they challenge you and say, No, you can't do this," you could just say
you know what?
Listen to this.
This is what Joe Anderson said," and then they can call me and I can prove I'm right.
This has happened a time or two.
Yes, I would say, in this type of case I would go to the Social Security office because they're
probably gonna tell you you're wrong and you're not wrong.
Yeah, they're saying, "hey you can't do this."
You'll be like, "No I can do this," because but the rules changed but you qualify over
the old rules.
And you'll probably get someone new that didn't realize that it changed and so they'll have
to get their supervisor, and I don't know.
I would go in, but just bring, I don't know, some activities.
It's like sitting in the DMV, man.
Yeah.
And the other thing I would bring is I would actually go to the Social Security website
that talks about that you could still do this by filing and suspending prior to April 30th,
2016.
So then you hand it to them when they say you can't do it.
I think Mary Beth even told us that if you call the Social Security Administration and
you get an answer that doesn't make sense or it confuses you, hang up and call back
and talk to someone else.
Yeah.
When this whole rule changed, we were rushing clients into file and suspend and then they
would say, no they told us we can't do it."
No, you can do it.
Then how about the doctor, because they were already past full retirement age, we're like
no, you can file and suspend.
She can claim - no, they said we can't do it.
Yeah, so I sent them a bunch of stuff and he went in but he got a different person,
no problem.
And he had all this stuff he didn't need.
But anyway.