Starting SSA retirement – now or later?

Q: I had expected to retire and start my Social Security next year at age 64 but I’ve been reading articles urging people to wait until reaching at least their SSA full retirement age, for me age 66, before starting benefits. What is best?

 A: One aspect of this question shows how Social Security has influenced retirement thinking. Prior to the Social Security Act legislation of 1935, few people were able to retire. According to the history section of the SSA website, only about five percent of the elderly received a retirement pension in 1932. People generally worked as long as they physically could do so. The concept of retirement, whether at 62 or a different age, is thanks in part to Social Security.

There is no one answer for when you should start Social Security retirement related benefits. This is a very individual decision, based on your own personal family and financial circumstances. 

If you live to the average life expectancy for your age, you will receive about the same amount in lifetime Social Security retirement benefits no matter whether you start receiving benefits at age 62, full retirement age, age 70 or any age in between. However, monthly benefit amounts can differ substantially based on when you start. Basically, you can get lower monthly payments for a longer period of time or higher monthly payments over a shorter period of time. Consider more than just the amount in your planning.

I have also seen articles suggesting that people delay starting SSA retirement benefits in order to receive a higher monthly amount. Benefit amounts change monthly in relation to your full retirement age (FRA).  Using your FRA of 66, which includes birth years of 1943-1954, if you start receiving retirement Social Security retirement at age 62, you receive 75 percent of your full retirement age amount because you will be getting benefits for an additional 48 months before FRA. Waiting until age 65, you get 93.3 percent of your FRA amount because you will be getting benefits for an additional 12 months. For an age 66 FRA, monthly percentages for age 62 – 66 are here. If delaying benefits past FRA, up to age 70 monthly increases equal 8 percent annually. Some articles encouraging waiting that I’ve seen mention that this is a larger rate of return than many investments currently offer.

There is no one answer for when you should start Social Security retirement related benefits. Next time I will discuss some topics for your consideration.

Estimate change in current earnings on future SSA retirement

Q: I have an offer to help build a new company and, if I accept it, for at least several years my earnings will be much lower than now. Can I estimate how lower earnings will reduce my future Social Security retirement?

A: Yes. Estimate the effect of lower and higher future earnings with the Retirement Estimator at The Retirement Estimator, one of the Social Security online retirement planning tools at, connects to your actual Social Security earnings record to provide personal retirement estimates at age 62, at your full retirement age, and at age 70.

The initial Retirement Estimator reply assumes that your most recent wages or self-employment earnings continue at the same amount into the future, but you can change this to obtain estimates at different ages and different future earnings amounts. Comparing your estimates for the same age based on the initial earnings level and then with lower or higher earnings provides an approximate result of different earnings on your future Social Security retirement amount. Using separate estimates, you can estimate future benefits based on either lower or higher earnings. Future earnings of more than one amount cannot be used in one estimate.

You can use the Retirement Estimator if you are enrolled in Medicare, but not if you are now applying for or receiving SSA benefits.   

Social Security retirement is based on your best 35 years of employment and your age, in months, compared to your full retirement age. You can get estimates at different ages with the Retirement Estimator. For specific months, other online tools are available in the retirement planner section,  

The Retirement Estimator reply does not show personal information or your earnings record. To see your earnings record, establish a my Social Security account at and view your Social Security Statement.



Replace a Medicare card online & other webcasts

National Social Security webinars are at the SSA homepage, . From there, go to the Social Media Hub in the lower right corner. Clicking on the persons image at right or on “more social media” brings you to webinars, including one recorded in April about retirement planning.

Adding to the national webinars, you can watch webcasts through the SSA Denver Region site. The Social Security Administration includes ten regions. Denver Region, where I am, directly serves residents of Colorado, Montana, North Dakota, South Dakota, Wyoming, Utah, western Minnesota and three Canadian provinces.

Brand new on the Denver Region site is How to Replace Your Medicare Card Online. Just short of six minutes in length, it contains a brief Medicare introduction, shows how to replace your Medicare card online, and mentions my Social Security.

Replacing your Medicare card is just one of the many online Social Security services available at no charge, whether or not you receive monthly benefits.

 Recorded last November, the Social Security Denver Region webcast Social Security Frequently Asked Questions is still available.

In approximately 20 minutes, the webinar discusses Social Security retirement, survivors and disability program topics, how benefit amounts are determined for individuals and spouses, how to replace a Social Security card, and more. 

So that you can easily find information for yourself, the webinar also highlights the Frequently Asked Questions (FAQs) area of the Social Security website,



Benefits to a wife or husband (spousal benefits)

An overheard office conversation reminded me that I have not written about spousal benefits in a while. A man wanted to know why his wife could not receive Social Security benefits through his record. Key to his thinking was that her own Social Security retirement amount was less than one-half of his, a very popular misconception.  

Like many misconceptions, there is a historical basis for this. In the early days of Social Security often only the husband was employed, with the wife busy but unemployed at home. In addition, no one could begin monthly retirements before full retirement age because early retirement (age reduced) benefits did not exist yet. Now, both wife and husband are often employed and reduced retirement benefits can begin as young as age 62, with full retirement ages ranging from 65 to 67 under existing law.

Social Security benefits are gender neutral. Both men and women can receive spousal (wife/husband) benefits and each must be alive for spousal benefits to apply. Survivors benefits to a widow or widower are computed differently and might be payable even if a spousal benefit was not. 

Returning to spousal benefits, the one-half idea has some validity but it refers to a comparison of the wife and husband’s individual full retirement age (FRA) amounts, not the monthly amount that either is actually receiving.   

The most that a spouse with lower career earnings could receive through the record of her or his higher earning spouse is one-half of the higher earners full retirement age amount. This is a maximum and reduced by their own Social Security retirement and by age, if younger than FRA. 

To learn if spousal benefits are possible, compare one-half the higher full retirement age (FRA) amount to the lower FRA amount.    

For example, leaving aside the actual monthly benefit amount, say we have a couple where one person has a FRA amount of $2,000 and the other has a FRA amount of $900. 

Half of the higher $2,000 FRA amount is $1,000. Since the other person’s smaller $900 FRA amount is less than this $1,000 (one-half of the higher) amount, a spousal benefit is possible. If the smaller FRA amount were $1,000 or more, and therefore not less than half of the higher, spousal benefits would not be paid.

Note that this only shows IF a spousal benefit is possible, not how much. How much a spousal benefit is depends on the person’s own Social Security retirement amount and their age. In this example, the MOST a spousal benefit could be is $100 per month, derived by subtracting the lower FRA amount of $900 from one-half the higher ($1,000) FRA amount. Potentially reduced for age, the net spousal amount is added to his or her own monthly retirement amount. 

Using the same full retirement age amounts, but with age reduced benefits involved, you can see how the one-half of benefit misconception, rather than the FRA comparison, can lead you astray.

Using the same couple, one person has a full retirement age (FRA) amount of $2,000 and the other has a FRA amount of $900.

However, now the person with the $2,000 FRA amount started retirement at age 62 (with age 66 FRA), giving him or her a benefit reduction of about 25 percent, resulting in a monthly amount of about $1,500.

The person with the FRA amount of $900 waited until full retirement age before starting Social Security. Since he or she waited until FRA, there is no age reduction and the full FRA monthly amount of $900 is received.  

Comparing the actual benefit amounts of $1,500 and $900, one-half of the higher is $1,500 divided by 2 = $750. Given that the overall smaller benefit amount of $900 is more than one-half the higher $1,500, you would wrongly conclude that spousal benefits are not payable. 

The Social Security website,, has information to help plan your retirement planning.

Use the Retirement Estimator to estimates your personal full retirement age amount. Learn your full retirement age and obtain approximate monthly reduction percentages at

ID questions when creating your “my Social Security” account

Q: Some of the security questions when I created a my Social Security account took me by surprise. While I expected the often seen birthdate type of question, my Social Security questions involved more details than I expected Social Security to have about me. Where do the questions come from?

A: This question was asked during one of my retirement seminars. Before answering it, I think it is important to mention that the Social Security Administration has less personal information then many people think. If not receiving monthly benefits, the bulk of personal information held by Social Security about you is from your Social Security number (SSN) application as updated, and your work history. If receiving benefits, the agency has information that you provided and needed to pay those benefits, including your address and direct deposit bank account information. 

Maintaining the security of your personal information on Social Security records is very important to the agency, which brings us back to the  question.  

Anyone at least age 18 and having an email address can create their own online my Social Security account. To create an account, you must provide some personal information about yourself and give us answers to some questions that only you are likely to know. Next, you create a username and password that you will use to access your online account. This process protects you and keeps your personal Social Security information private.

Some of the personal information requested is your name, Social Security number and birthdate. For other questions, an external authentication service provider, Experian, helps Social Security verify your identity by using information from your Experian credit report. This can result in what is known as a “soft inquiry” on your Experian credit report but does not affect credit scores and is not reported to lenders. It does provide the ability to protect your personal information by asking questions that only you should be able to answer.   

Please note that you cannot create a my Social Security account online if you have a security freeze, fraud alert, or both on your Experian credit report. You first must ask Experian to remove the freeze or alert. 

A link to my Social Security is on the homepage of or you can go directly to  Linked from that page are details explaining how your identity is verified and protected


New Social Security retirement planning webinar on website

Planning for your retirement is important. Adding to the Retirement Planner information, a brand new Social Security webinar has been added to the Social Security website,

Just recorded, this approximately 28-minute video touches upon many questions that I am routinely asked. 

The How Social Security Can Help You Plan for Retirement webinar topics include:

     How much will your retirement benefit be

     Full retirement age

     Benefits for family members

     Looking ahead – planning for retirement

     When to retire

     Life expectancy calculator

To watch this webinar, go to the Social Security homepage, and then to the Social Media Hub in the lower right corner. Clicking on the persons image at right or on “more social media” brings you to the new retirement planning, and other, webinars. 

Pensions and Social Security, Part 3 – GPO

For the relatively few people involved, today completes the series about pensions that might affect Social Security benefits. 

The general rule is that your company pension will not affect your Social Security benefits because most employment is covered by Social Security.  

The usual exception to this are pensions from government employment not covered by Social Security. A government pension from work covered by Social Security will not affect SSA benefits.

Not covered by Social Security means you did not pay Social Security payroll tax on those earnings, you did not earn coverage for SSA benefits and those earnings do not appear on your SSA work record. Any government level can be involved, not just Federal or state. Local government employment, including school districts, may or may not be covered by Social Security. 

Last week I discussed the Windfall Elimination Provision (WEP), when the person receives Social Security retirement on his or her own record through other work, separate from the non-covered government employment.

Today’s topic is the Government Pension Offset (GPO), involved when the Social Security benefits are through someone else’s record rather than your own work. The GPO affects SSA benefits as a spouse, widow or widower and is a direct offset by the government pension against Social Security benefits.

The Government Pension Offset reduces the amount of your Social Security spouse’s, widow’s or widower’s benefits by two-thirds of the amount of your government pension. The GPO can offset the total Social Security benefit.

Estimating the GPO amount is not hard. Do the math yourself or use the online GPO calculator. For example, if you receive a monthly civil service pension of $600, two-thirds of that, or $400, must be used to offset your Social Security spouse’s, widow’s or widower’s benefits. If you are eligible for a $500 spouse’s benefit, you will receive $100 per month from Social Security ($500 – $400 = $100).

Exemptions exist to the Government Pension Offset (GPO). More about the GPO is in SSA publication 05-10007, Government Pension Offset.

 Other factors that may affect Social Security benefits are part of the SSA online retirement planner at




Pensions and Social Security, Part 2 – WEP

Continuing the topic of how a pension might affect Social Security benefits, the general rule is that your company pension will not affect your Social Security benefits because most employment is covered by Social Security.

So what pensions can affect Social Security? The main pension involved is from government employment, not covered by Social Security. Key is that this government employment was not covered by Social Security, meaning you did not pay Social Security payroll tax on those earnings, you did not earn coverage for SSA benefits and those earnings do not appear on your SSA work record.

Relatively few people are in this situation, but it is important to those that are. Any government level can be involved, not just Federal or state. Local government employment, including school districts, may or may not be covered by Social Security. 

Since their government employment was not covered by Social Security, for those involved any eligibility to a Social Security monthly benefit would have been earned either from other work that the person had on their own or through someone else’s record, such as through a spouse. The government pension not covered by Social Security affects benefits differently depending on this.

Called the Windfall Elimination Provision (WEP), today’s topic is when the SSA benefit is from the person’s own work. SSA benefits through someone else’s record will be covered later.

Enacted in the Social Security Amendments of 1983, the Windfall Elimination Provision provides a different formula for calculating SSA amounts. While not a direct offset or reduction of the government pension against the persons own Social Security benefit, the formula used results in a lower Social Security ­amount than otherwise would be received.

Why is this? Social Security benefits replace a percentage of a worker’s pre-retirement earnings. By design, lower-paid workers get a larger percentage of pre-retirement earnings than higher paid workers. Work not covered by Social Security does not appear on the person’s SSA record. This incorrectly makes the person’s average earnings appear lower, leading to a larger percentage of pre-retirement earnings paid. The Windfall Elimination Provision formula adjusts for this. 

The WEP formula takes into account how many years of work you have under Social Security covered employment. Overall, the reduction in the Social Security benefit cannot be more than one-half of the amount of the pension from work not covered by Social Security taxes.

The Windfall Elimination Provision does not affect most people. More about it is in SSA publication 05-10045 – Windfall Elimination Provision.

Use the special WEP Online Calculator if the WEP involves you. The usual website calculators, including the Retirement Estimator and your Social Security Statement, will not provide an accurate estimate when the WEP is a factor.



How much work is needed for SSA retirement?

Q: For Social Security retirement, I have heard both that you need 10 years of work and 35 years of work. Which is right?  

A: In a way, both are correct but they actually involve two different topics. One topic is the amount of work required to be eligible for Social Security retirement. The other is how the amount of your retirement is calculated. 

All Social Security retirement, survivors or disability benefits have a work requirement that varies with the specific program. You are insured on your record when you have enough work for a given benefit. The amount of work needed is measured by credits, also called quarters of coverage since you can earn a maximum of four quarters per year based on your gross wages and net self-employment earnings. In 2013, earnings of $1,160 provide one credit so earnings of at least $4,640 during the year provide all four.  

For Social Security retirement, a person needs 40 credits, which is where the 10 years comes from. Becoming insured for retirement can take more than 10 years if you have low earnings in a year. With less than 40 credits you are not insured, 40 or more means you have enough work to receive a retirement benefit. Once insured status is established, your number of credits has nothing to do with how much the benefit amount will be.  

Your entire career work history is important in determining your own Social Security retirement amount. To compute this amount, the best 35 years of your work earnings are used. While the highest earnings are often just before retirement, this is not always the case. If you do not have 35 years of work, zero years are used to reach 35 years. These best 35 years of earnings are weighted for inflation as part of computing your full retirement age (FRA) amount. Depending on your actual age when starting benefits, this FRA amount is adjusted up or down as needed to arrive at your retirement amount. 

The online Social Security Statement states if you are insured for the different SSA programs and shows your earnings record history. See your Statement by creating a my Social Security account at A sample Statement is viewable at that link.


Born on first of month – FRA and the retirement test

Q: I reach my full retirement age (FRA) of 66 on May 1, 2013. Is there any significance to waiting until age 66 ½ to start my Social Security retirement? That is when I plan to retire. 

A: You can start your Social Security retirement with whatever month you think best, if you meet all requirements at the time. 

If starting SSA retirement when older than full retirement age, your monthly amount would be more than the full retirement age (FRA) amount. If starting before FRA, the amount would be less than the FRA amount.The amount of increase or reduction depends on the specific number of months involved, not your age in years.

Being born on the first day of the month is important for you. Legal precedent states that a person attains their age on the day before their birthday. When born on the first of the month, Social Security figures your benefit amount and your full retirement age as if your birthday was in the previous month. With a birthday of May 1, you are considered to reach FRA in April. Consider this when deciding when to start your Social Security retirement.  

Estimate your full retirement age (FRA) amount with the Retirement Estimator in the SSA Retirement Planner section ( Then, use your estimated FRA amount with the “compute the effect of early or delayed retirement” calculator to estimate amounts for specific months before or after FRA. This calculator is at

How much will you earn in 2013? The earnings limit (annual earnings test) for people turning age 66, their full retirement age, in 2013 is $40,080. A special monthly, one time, earnings test exists and usually used in the first year of retirement if high earnings are expected that year. Depending on your anticipated 2013 earnings, you might decide to start benefits with January, with a smaller monthly benefit, even though you plan to continue working until May. Use the tools mentioned above to estimate benefits starting with any month. The earnings test stops with the month you reach full retirement age. With no limit on your earnings, starting your Social Security at FRA is another option even if you continue to work.