You might want to get a second opinion before you decide to claim your Social Security retirement benefits.
The Social Security Administration often fails to give out key details to retirees in face-to-face meetings and online that could cost people tens of thousands of dollars in benefits, according to a new study by the Government Accountability Office.
The report's main finding is that the SSA should do a better job of informing people that they could receive higher monthly payments if they delayed claiming retirement benefits.
Here are the two most egregious examples in the report:
- SSA claims specialists did not discuss the advantages to waiting to claim benefits at a later age in eight of 26 in-person interviews that the GAO observed where people could have received a higher monthly benefit if they had waited to claim. SSA requires all its staff to talk to people about the pros and cons of their filing decisions.
- In 10 observed interviews, claims specialists offered the opportunity for people to claim up to 6 months of retroactive benefits as a lump sum. While a lump sum may be attractive to retirees, taking it means a permanent reduction in monthly benefits. Specialists explained this trade-off only in one interview that the GAO watched.
"For many people, SSA may be their only source of information when making the important decision of when to claim retirement benefits. Though we found SSA's claims process largely provides accurate information and avoids overt financial advice, certain key information is not provided or explained clearly during the claims process," GAO researchers concluded.