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Benefit checks are accurate

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POSTED March 20, 2015 7:13 p.m.

Q: I am 82 years old. My husband is 85. Based on a recent column you wrote about wives getting benefits from their husband’s account, I think I am due more money from Social Security. How do I go about getting what is rightfully mine?

A: I probably get a couple dozen emails like this every week. And even more after I write a column about Social Security benefits for spouses. I’m worried that I am unintentionally misleading too many people or giving them false hope that they are due more money from the government.

I’ve made this point before and I will make it again: Assuming the Social Security Administration has all the proper facts about your case (date of birth, marital history, earnings reports, etc.), there is an extremely high likelihood that you are being paid correctly. Every study about Social Security benefit accuracy I’ve ever seen — both internal SSA studies and external reviews — shows that benefits are accurately figured about 99 percent of the time.

Still, human nature being what it is, I guess it is just normal for people to worry that they are somehow getting the short end of the stick when it comes to Social Security benefits. And given the high degree of mistrust so many people in this country have of their government, that carries over to their conviction that SSA has messed up their benefit computation.

And then when they read a column I’ve written that attempts to explain the intricacies of the various Social Security benefit formulas and the myriad of permutations that they can go through; well, I guess I can understand why people start to question the accuracy of their Social Security checks.

But one of the points I want to make in this column is that the time to wonder about and question your Social Security payment is not 20 years after your benefits have begun! In fact, it’s not even 20 months. When you first start getting Social Security benefits, you receive an award letter in the mail. It gives you basic information about your eligibility and also tells you about your benefit rate. That letter includes a paragraph that essentially says this: “If you disagree with any aspect of your claim, you have six months to file an appeal.”

So again, let me try to reassure my skeptical readers who worry that they are being paid incorrectly that it is extremely likely that they are getting exactly the Social Security benefits they are due. But if you are concerned, the time to scratch that skeptical itch is within 6 months of when your benefits began, not 10 or 20 years down the road.

Q: The government has really messed up my Social Security checks. I signed up for Social Security when I was 62 years old. I continued to work part-time and sometimes I made more than the earnings limits allowed. And this has caused me all kinds of grief. One month I get a letter telling me that they owe me money. Then it seems the next month I get a letter telling me that I owe them money. Why can’t the government get things right?

A: I purposely put your question in this column to make some more points about the accuracy of Social Security benefit computations.

In my answer to the first questioner, I said that there is a 99 percent chance that Social Security beneficiaries are being paid correctly. But you will note that I said that high degree of accuracy occurs when SSA has all the proper facts about your case. And in your situation, your eligibility for benefits changes each time SSA gets new information about your earnings.

I have written before in this column that the Social Security earnings penalty provisions can be extremely complex. The law currently says that beneficiaries under age 66 who are still working will lose one dollar from their benefits for every two dollars they make over an earnings threshold that changes from year to year. In 2015, that threshold is $15,720.

The problem with enforcing this law is that incomes can fluctuate, certainly from year to year and many times from month to month. Here is a typical example. (And in this example, I am not even going to get into the complexities involved in special earnings penalty rules involved in the first year of retirement and in the year a person attains age 66. That is fodder for another column.)

Fred signs up for Social Security at age 62 in 2015 and tells Social Security he is still working but expects his income for the year to be under $15,720. So SSA starts sending him his full benefits each month. A couple months later, Fred starts working overtime and suddenly he is making a lot more money. He now tells SSA he thinks he will make about $20,000. That generates a letter to Fred telling him he has been overpaid and that based on his new estimate, some future benefits must be withheld. But then a few months later, Fred is laid off and now he thinks he will only make $17,000 for the year. That triggers yet another report to SSA and yet another benefit adjustment letter. Now we reach the early months of 2016 and Fred gets his W-2 form showing his actual earnings for 2015 were 17,800. Yet another benefit adjustment is needed. And this mess is further compounded by Fred’s projection that he will make $18,000 in 2016 — and the vicious cycle starts all over again.

This example is not a gross exaggeration. It happens all the time. It is extremely difficult to pay someone properly when the law requires an adjustment to monthly Social Security benefits every time there is a change in someone’s income — or projected income. But the point I want to make with this example is even though Fred benefits were constantly being adjusted, every time he presented SSA with his earnings data, he was being paid correctly based on the information available at the time. The overpayments and underpayments occurred because of the fluctuation in earnings.

So even though this letter writer accused the government of not being able to get things right, they probably did. It’s just that what was “right” changed from one month to the next.

If you have a Social Security question, Tom Margenau has the answer. Contact him at thomas.margenau@comcast.net. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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