Ask Larry: How Far In Advance Do I Need To Apply For Social Security?

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Today’s column addresses questions about when you can submit your application to begin benefits, Social Security’s earnings test, working part time while receiving disability benefits and what happens to money paid in Social Security taxes but not collected. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.


How Far In Advance Do I Need To Apply For Social Security?

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Hi Larry, I turn 70 in January. How far in advance do I need to apply for Social Security? My neighbor insists that you must apply four months before your benefits can start. He says that because I’ve waited, the earliest I can get benefits is now March. But your answers to other questions seem to indicate that this is not true. My neighbor however is adamant and he has already applied. He said that’s how it worked for him but he made sure to apply four months before his birthday. He says there’s nothing I can do about it now. Is he right? Thanks, Janet

Hi Janet, Your neighbor is wrong. He’s misunderstanding Social Security’s guidance about filing.

You can apply for benefits up to four months in advance, so you could apply now. You don’t really have to file in advance since you would be allowed to claim benefits up to six months retroactively but if you want to make sure your first check arrives in a timely manner, you should probably plan on filing sooner rather than later. My understanding is that Social Security’s appointment schedule is backlogged, so unless you’re able to file online you’ll probably want to contact Social Security pretty soon.

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By the way, if you want to claim benefits at 70 and your 70th birthday is in January 2021, you should choose January 2021 as your month of election to start your benefits. Social Security pays benefits a month behind, so your payment for January will be due in February. Best, Larry


How Much Can I Work And Earn If I’ve Reached Retirement Age?

Hi Larry, I have reached my retirement age. How much can I earn if I still work full time? Thanks, Stephen

Hi Stephen, If you mean that you’ve reached your full retirement age (FRA), then you could work and earn an unlimited amount and still be paid all of your Social Security benefits.

However, if you file for Social Security benefits and you’re under FRA, at least some of your benefits may need to be withheld if you earn more than the Social Security earnings test exempt amount. My company’s software — Maximize My Social Security or MaxiFi Planner — can account for the the earnings test for those who are still not yet at their full retirement age. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


How Much Can I Earn Without Jeopardizing My Disability Benefits?

Hi Larry, I am 57 and have been on disability for 10 years. I am contemplating trying to get a flexjob where I can work some hours from home, as I am in a high risk group for Covid 19. The reason I am looking to pick up some work, if I can is my husband has been furloughed since April with no end in sight. And with my education and work experience along with the current work conditions, I have found jobs in my field on line.

How much can I earn without jeopardizing my disability? I’m positive it would not be a problem to reapply, but it is a pain. Although the last time I received a decision in a month without seeing their doctors. Unheard of! Any advice you could give would be appreciated. Thanks, Rae

Hi Rae, If you haven’t worked at all since starting on Social Security disability (SSDI) benefits, you would first have a 9-month trial work period (TWP) during which you could earn an unlimited amount without losing your SSDI benefits.

Once you’ve completed your TWP, though, your earnings would need to average below the amount that Social Security considers to be substantial gainful activity (SGA) or else your benefits could be suspended or terminated. The current monthly SGA earnings amount in 2020 is $1,260 for non-blind individuals, and $2,110 for people who are classified as statutorily blind. Best, Larry


What Happens To The Money I Paid In?

Hi Larry, I was widowed at 58 and had been married to my blue water navy veteran for almost 38 years. But there are no veteran benefits. I started drawing my widow’s benefits at 60. I get $1,281 a month and $147 is taken out before I get my check.

I am 69 and worked for years but my Social Security retirement benefit is about $100 less than my widow’s benefit so I will continue to draw my widow’s benefit. What happens to money I paid in and the other portion of his benefit amount that I don’t get because I filed early at 60? My medical and other expenses are too high. Is there any way I can qualify for more? Thanks, Kristie

Hi Kristie, I’m sorry for your loss.

I wish that I had something helpful to tell you, but I don’t. If a person qualifies for more than one type of Social Security benefit, they can only be paid the higher of the two benefit rates. If you started drawing your widow’s benefits at 60 then the resulting 28.5% reduction for age applied to your benefit rate is permanent. So, unless your own benefit rate would be higher than your widow’s rate, you’re probably stuck with the amount you’re receiving.

I should mention though that your own benefit rate could continue to accrue delayed retirement credits (DRC) until you reach 70, so you should check back with Social Security when you get close to 70 to see if your own rate may have increased to more than your widow’s rate by that time.

As far as what happens to the money you contributed to Social Security when you were working, those taxes go into Social Security’s trust fund. All Social Security benefits are paid from the trust fund, and there’s no other way to receive money from the trust fund unless you qualify for benefits. If a person doesn’t qualify for benefits, the tax money they paid into Social Security simply remains in the trust fund until it’s needed to pay benefits to people who do qualify for benefits. Best, Larry


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