On Feb. 3, Boston University Professor of Economics Laurence Kotlikoff penned a worrisome column for Forbes about the dangers of filing for Social Security benefits in person.
He started with a basic question: Should you file for your Social Security Income (SSI) benefits…
- Over the phone?
- Physically in the local office?
And his answer was: file online when possible.
Here's the troubling reason why…
Filing for Social Security Benefits Online Is Best
Filing online is your safest bet because of a little technical detail on the physical application form that the government can use against you…
You see, the form technically doesn't let anyone specify the date his or her retirement benefits should begin. That gives SS workers free reign to make that crucial decision for you.
"The staff are free to give you retroactive benefits you don't want," wrote Kotlikoff, "thereby, permanently reducing your retirement benefit."
Take Kotlikoff's example. His dentist tried to collect his retirement benefits starting at age 70. He went to the local Social Security office three months before his birthday and specified to the staff that he wanted to start his benefits at 70.
But instead of doing what he asked, Social Security staffers set his retirement benefit initial collection date back six months from the date he appeared in the office. "This was nine months before [his] 70th birthday. As a result, [my dentist] ended up with a retirement benefit that is 6% lower for the rest of his life than it should have been."
For the rest of his life…
If Kotlikoff's dentist had filed online, he could have specified in the comments section that he wanted to begin his SSI benefits in the month he turned 70.
That's the most important factor here – the comments section…
You see, the comments section has to be filled out by "Social Security staffers" in person. Oftentimes they leave this section blank, which is where they should be specifying an applicant's preferred benefits start date.
However, online applicants fill out this section themselves.
In a follow up to Kotlikoff's Forbes article, PBS published a post last Thursday in which it recommended that, if you're planning to file for SSI benefits in person, you should make sure to do so with a trusted "Social Security person."
It's a lot of minutiae to remember. And the SS code is intentionally convoluted.
Luckily, Money Morning has its own Social Security expert on constant standby.
Our virtuoso has spent years deciphering and pouring over Social Security code. And he's unearthed myriad loopholes that retirees or near-retirees simply aren't aware of.
In fact, there are 12 soon-to-be-banned loopholes that you could be eligible to take advantage of right now, but might not even know about. As many as 21.3 million Americans could be eligible for large payouts from these benefits.
The good news is if you're an eligible individual and you claim these benefits now, you can be grandfathered in. Get more info on these 12 "banned" benefits here…
- Forbes: Don't Let Social Security Touch Your Application
- PBS Newshour: Column: Should You File for Your Social Security Benefits Online, Over the Phone or in Person?