Ask Rusty – Losing benefits you have earned

Benefits road sign

Dear Rusty:  

I’m 73 years old and have finally decided to call it quits from working and start taking life easy.  My wife is 72 and has never worked outside our home, but we’re both in good health and are looking forward to “the good life” just doing what we want to do.  I haven’t taken my Social Security yet because I’ve been working, but now that I’m retired from work we’ll need the extra money to do the things we want to do.  How and when should I apply for benefits?

Signed: Finally Retired

Dear Finally:  

Oh my, yours is a classic example of why everyone should seek the advice of a qualified advisor before making Social Security decisions. And by qualified advisor I don’t mean a friend who thinks they know what you should do, or how you personally think the program works.  I’m afraid that by not applying sooner you have forfeited a considerable amount of money because, even though you were still working full time, your Social Security benefit reached its maximum when you became 70 years of age, so you should have applied then.   You should now immediately apply for your Social Security benefits and your wife should simultaneously apply for spousal benefits, which will be ½ of the benefit you were entitled to when you became 66, plus any COLA increases and benefit increases due to any higher earnings you had since that time.

Although you were eligible to take your benefits without reduction at age 66, waiting past that earned you 8% per year in delayed retirement credits, up to the time you turned 70 when your benefit was 32 % higher than it was at 66. In fact, once you reached your full retirement age of 66 you could have applied for benefits and continued to work, and would not have been subject to Social Security’s “earnings limit”.  Since your benefit reached its maximum at age 70, there was no advantage to you by waiting past that to file.

When you apply now, you and your wife should both set your benefit start date as six months prior to the date you apply, because Social Security will pay up to six months retroactive benefits.  Unfortunately the 2 ½ years of benefit you didn’t take since you turned 70 are lost, as are the 2 ½ years of spousal benefits that your wife was entitled to as soon as you reached 70 – tens of thousands of dollars depending upon your benefit amounts.  This is an unfortunate reality of the system:  the onus to apply for benefits is on you and your wife; Social Security doesn’t automatically enroll you in the program at any time.

This is another example of how far too many people misunderstand how the Social Security program works and make decisions based upon incorrect assumptions.  And the result is often many thousands of dollars in lost benefits.

The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed in this article are the viewpoints of the AMAC Foundation’s Social Security Advisory. To submit a request, contact the Foundation at