Maybe Waiting To Start Drawing Retirement Benefits Isn't Such A Good Idea

     Most commentators advise waiting until age 70 to start drawing Social Security retirement benefits because if you wait, you draw more. Everyone already knows that if you wait until full retirement age, currently 66, you draw 25% more than if you start retirement benefits at age 62, but if you delay starting on benefits until age 70 you receive even more benefits. There's no point waiting until after age 70 because benefits don't go up after that. 

    Here's a chart showing the "breakeven analysis" used to display the argument that it's best to wait until age 70 if you can:

     The Motley Fool argues that the advice to wait until age 70 is bunk. They say that the standard breakeven analysis is flawed because it doesn't factor in the time value of money, that is, interest. If you start drawing $1,000 a month at age 66 and put it in the bank until age 70, you don't just end up with $1,000 times 48 months, $48,000, you end up with a larger amount due to the interest you will have earned. Here's the Motley Fool's breakeven analysis, assuming a 5% interest rate:

     A 5% interest rate may be a bit more than you're likely to get under current conditions but you get the idea. Delaying starting benefits may not be all it's cracked up to be. Maybe Social Security isn't giving a big enough delayed retirement credit to make it worth foregoing the income now.

Social Security's Office of Inspector General Is Highly Staffed And Gets Good Results

     From the Brookings Institution:

FTE = Full Time Equivalent Employees

Meadows East Building Closed Today

     The Meadows East Building that is part of Social Security's central offices in the Baltimore area is closed today due to "facilities issues."  As of two years ago Meadows East housed 275 agency employees. The building was closed for a time last summer due to HVAC problems.

CCD Endorsed increase In Fee Cap

     The Coalition for Citizens with Disabilities (CCD), the major umbrella organization of disability organizations in the U.S. has sent a letter to the Acting Commissioner of Social Security endorsing an increase in the cap on fees that attorneys may charge for representing disability claimants and for a change in the regulations to require an annual cost of living adjustment on the cap. The cap has been stuck at $6,000 since 2009. If it were adjusted for inflation since the statute was first passed, the cap would be over $7,000. However, CCD only endorsed adjusting the cap to $6,904, basing the adjustment on the increase in the cost of living since 2009.

     Despite what you may hear from some people who have never represented a Social Security claimant, either the cap is raised in the not too distant future or there will be no further representation of Social Security disability claimants because it won't be economically feasible. Already, the number of attorneys representing Social Security claimants has declined significantly. The rest of us are struggling to hang on. Anyone who thinks it's easy to make money representing Social Security claimants  is encouraged to start doing it themselves. It may be ten years or more since I've heard of a Social Security employee leaving the agency to start representing claimants.

A Three Year Battle Ends With Success

      The parents of four year old Maziah Mills-Sorrells have been trying to get Supplemental Security Income disability benefits for her for three years. A District Court has finally approved her claim. Maziah was born with Klumpke's palsy which causes paralysis of her left arm. He parents both work and are trying to support a family of four on their minimum wage fast food jobs.

Social Security Isn't Fair

     Neil Irwin at the New York Times thinks Social Security isn't fair. The rich get a much better deal than the poor. 

     I hate to point it out but Irwin's analysis like every other analysis that attempts to compute a rate of return on Social Security is deeply flawed since it fails to take into consideration dependent and survivor benefits. However, in this case I don't know that this flaw necessarily detracts from his point. Both rich and poor receive dependent and survivor benefits. I don't know that either gets a better return on dependent and survivor benefits. Just don't take the rates of return that Irwin is giving literally. They're useful in making comparisons but in absolute terms they're meaningless.

They Read The Writing On The Wall

     That graffiti covered men's room at the Social Security field office in Las Vegas? They're going to fix it.

Underpayments To Widows And Widowers

     From a recent report by Social Security's Office of Inspector General (OIG):

SSA needs to improve its controls to ensure it establishes the correct PIA [Primary Insurance Amount, the basis for computing how much a claimant is to be paid] for widow(er)s when deceased wage earners die before age 62. Based on our random sample, we estimated that SSA underpaid approximately $224 million to 25,309 widow(er)s....

     Social Security agreed that they need to do something about this problem.
     The thing that gets me is that if this report had said that claimants were being overpaid by $224 million, the House Social Security Subcommittee would hold a hearing and grill Social Security officials. They would insinuate that fraud must be involved. However, when it's $224 million in underpayments I'm sure the reaction will be "Meh."
     Overpayments and underpayments are both important. They deserve equal treatment.