Transcription
Hello friends. If you were born before 1958, there is a specific and urgent reason why this video matters to you more than it matters to anyone else watching it right now. The rules that govern your Social Security benefit, the full retirement age that applies to you, the delayed retirement credit calculation, and the specific legal changes that took effect in 2025, all combined to create a window for people in your birth year range that does not exist for people born later.
The number I want to focus on today is $26,400. That is the annual difference between the lowest possible Social Security benefit available to a maximum earner and the highest. $2,969 per month if you claimed at 62 versus $5,181 per month if you delayed to 70. Multiply the difference by 12 and you get $26,544 per year, permanently. Every year for the rest of your life. And for your surviving spouse, every year for the rest of their life after you are gone. That is the outer range. Most people are not maximum earners. But the proportional math applies at every benefit level. And for people born before 1958, many of whom have already reached or passed their full retirement age of 66, there are specific strategies, corrections, and recent legal changes that can add thousands of dollars per year to what you receive. And that most people in your birth cohort have never been fully informed about.
My name is Carol Haines. I have spent 13 years as a certified financial counselor working with retirees. And the conversation I want to have with you today is the one I most often wish I could have had with people before they made decisions they cannot reverse. Let me start with what makes people born before 1958 different from those born after.
Your full retirement age is 66. Not 66 and 2 months, not 66 and 6 months, not 67, 66 exactly. This applies to everyone born between 1943 and 1954. For people born between 1955 and 1959, the full retirement age rises incrementally, reaching 66 and 10 months for those born in 1959. For people born in 1960 or later, the full retirement age is 67.
This distinction matters for two reasons. First, if you claimed your Social Security benefit at exactly 66 and you were born before 1955, you received 100% of your primary insurance amount. No reduction, no delayed credit, the full amount. Second, if you delayed past 66, you accumulated delayed retirement credits at 8% per year. Every year you waited past your full retirement age of 66, up to age 70, added 8% permanently to your benefit. For someone born before 1958 who delayed claiming from 66 to 70, the delayed credits added 32% to their full retirement age benefit. If your full retirement age benefit was $2,500 per month, delaying to 70 produced $3,300 per month. The difference is $800 per month or $9,600 per year, permanently.
Many people born before 1958 are now in their late 60s or early 70s. Some have been receiving Social Security for years. Some are still making decisions about when to claim, and some have made decisions based on incomplete information that has cost them significantly.
The first major issue I want to address is the Social Security Fairness Act because this is the change that has the most immediate and significant financial impact for people born before 1958 who worked in public service. On January 5th, 2025, the Social Security Fairness Act was signed into law. It permanently eliminated the Windfall Elimination Provision and the Government Pension Offset, two rules that had been reducing or eliminating Social Security benefits for people who received pensions from jobs that did not pay into Social Security. Teachers, firefighters, police officers, federal employees under the Civil Service Retirement System, and many state and local government workers were affected.
For people born before 1958 who are now in their late 60s or older, this law arrived after many had already been receiving reduced benefits for years. The Social Security Administration was required to recalculate every affected beneficiary's payment and pay the difference retroactively to January 2024. By mid-2025, over $17 billion had been distributed to more than 3 million people. But here is the situation that I want to address specifically. If you received a pension from a non-Social Security covered job, and you never applied for a Social Security spousal or survivor benefit because the Government Pension Offset would have reduced it to zero, you may have an unclaimed benefit right now that you have never received and that you may not even know you are entitled to.
The Government Pension Offset reduced your spousal or survivor benefit by 2/3 of your government pension. For many people, this calculation produced a benefit of exactly zero. They were advised that filing would produce nothing, and so they never filed. Now the offset is gone. What was zero is potentially hundreds of dollars per month. But the SSA does not automatically start paying you a benefit you never claimed. You have to apply. If you are a widow or widower of someone who worked in public service with a government pension and you never filed for a survivor benefit because you were told the offset would eliminate it, call the Social Security Administration at 1-800-772-1213 immediately and ask specifically about your eligibility under the Social Security Fairness Act. The retroactivity is limited, meaning every month you delay is a month of benefits you may not be able to recover. That is the first major issue.
The second major issue is the zero-year problem in the earnings record. And for people born before 1958, this takes a specific form that is different from what affects younger retirees. People born before 1958 are between 68 and 82 years old in 2026. Many of them built their careers in an era when working women were expected to leave the workforce for marriage, child-rearing, or caregiving. Many of them have earnings records with substantial gaps, 5, 10, or even 15 years of zeros from periods when they were not in paid employment. Social Security calculates your benefit using your 35 highest earning years. For someone with 30 years of actual earnings, five zeros are averaged in. For someone with 25 years of earnings, 10 zeros are averaged in. Each zero year reduces the average and permanently reduces the benefit.
For most people in this situation, the opportunity to eliminate the zero years by working additional years has already passed. But there is still an action available that most people have never taken, reviewing the earnings record itself for errors. Social Security earnings records are not infallible. They contain errors. Employers have failed to properly report wages. Self-employment income has been omitted. Earnings from a period when a name change occurred following marriage or divorce may have been recorded under a different social security number. Contributions made to the record under an incorrect number may not have been credited.
Log in to your My Social Security account at ssa.gov and review your earnings record year by year. If you find a year where your actual earnings were significantly higher than what the record shows, you have the right to correct that record. The correction process requires documentation. Typically, a W-2, tax return, or employer statement for the year in question. Corrections to earnings records can be made going back many years in some circumstances. A single corrected year that was showing zero, but should have shown $40,000 in earnings, can meaningfully increase the 35-year average and permanently raise the monthly benefit. For someone receiving a benefit based on a record with several incorrect years, the correction could add a hundred or more dollars per month for the rest of their life.
The third major issue is the claiming strategy for people born before 1958 who have not yet claimed. And for those who claimed early and want to know if anything can be done. For people born before 1958 who have not yet claimed Social Security, the delayed claiming math is straightforward. Your full retirement age is 66. Every year you delay past 66, up to 70, adds 8% to your benefit. At 70, you have added 32% above your full retirement age benefit. For someone with a full retirement age benefit of $2,000 per month, claiming at 70 produces $2,640 per month. The difference from claiming at 66 is $640 per month, or $7,680 per year, permanently.
For people born before 1958 who claimed early at 62, 63, or 64 and who are now regretting that decision, the 12-month withdrawal option may or may not still be available. The Social Security Administration allows you to withdraw your application and repay all benefits received within 12 months of your initial benefit start date. If that window has passed, there is a second option called voluntary suspension. Voluntary suspension allows you to stop receiving your Social Security benefit after full retirement age and resume receiving it later at a higher amount. If you claimed at 62 and are now at full retirement age of 66, you can voluntarily suspend your benefit. For every month of suspension past your full retirement age, your benefit increases by 2/3 of 1% or 8% per year. Suspending from 66 to 70 would add 32% to your benefit before it resumes. The trade-off is that you forego the monthly payments during the suspension period. Whether suspension is the right decision depends on your health, your other income sources, and your household's financial situation. But for someone in good health with other income who claimed early and has a meaningful improvement available through suspension, the math can be compelling.
The fourth major issue is the household coordination strategy and why it is specifically critical for people born before 1958. People born before 1958 are now between 68 and 82. Many are in their late 60s or early 70s. The household coordination I am about to describe is most powerful when implemented before the higher earner claims, but there are still significant decisions available even for households where one spouse has already claimed. The principle is this. When one spouse dies, the surviving spouse receives the higher of the two monthly benefits. The amount the higher earner locked in at their claiming age is the amount the surviving spouse will receive for potentially decades of widowhood.
For a couple where the higher earner claimed at 62 and locked in a reduced benefit, and the lower earner is still alive and has not yet claimed, there is still an opportunity. The lower earner can choose to delay their own claiming to build delayed retirement credits on their own record, and then evaluate at 70 whether their own delayed benefit or a survivor benefit on the higher earner's record is the more valuable option. The survivor benefit can be claimed as early as age 60. If you are a widow or a widower, and you have not yet claimed Social Security, you have a specific choice available that most people are not told about. You can claim your survivor benefit now and delay your own retirement benefit to age 70 to accumulate delayed credits. Or you can claim your own benefit now at a reduced rate and switch to the survivor benefit at your full retirement age when it reaches its maximum. The right choice depends on the relative of your own benefit and the survivor benefit, which requires running the actual numbers for your specific situation.
Let me close with the actions that matter most for people born before 1958. Log in to ssa.gov and review your complete earnings record. Look for any years where the reported earnings are incorrect. If you find errors, gather documentation and request a correction from the SSA. If you worked in a public sector job with a pension, and you have never claimed a Social Security spousal or survivor benefit because you were told the government pension offset would eliminate it, call 1-800-772-1213 this week. Ask specifically about your eligibility under the Social Security Fairness Act. If you have not yet claimed Social Security and are past your full retirement age of 66, calculate the benefit increase available from delaying to 70. Every additional year of delay adds 8% permanently. If you claimed early and are now past your full retirement age, ask the SSA about voluntary suspension and the benefit increase it would produce if you suspended from now until 70. And if you are a widow or widower, run the comparison between claiming your own benefit and claiming the survivor benefit at different ages to identify the sequence that produces the most lifetime income. Every one of these actions is available today. Everyone is based on rules that are already in effect, and everyone requires only that you know they exist and make the call. Send this video to one person in your life who was born before 1958 and who you know has never had a complete conversation about their social security options. That conversation could change their income for the rest of their life. I will see you in the next one.
Let me go deeper on each of the four issues I described because the practical details are where the money actually lives. On the Social Security Fairness Act, I want to address something that is affecting a specific and often overlooked group of people born before 1958. These are individuals who worked primarily in Social Security covered employment, but who also had a period of public sector work with a pension, and who had their own retirement benefit reduced by the Windfall Elimination Provision, rather than having their spousal benefit reduced by the Government Pension Offset. The Windfall Elimination Provision used a modified formula to calculate the Social Security retirement benefit for people who had earned pension income from non-covered employment. Instead of the standard formula, WEP applied a reduced replacement factor to the first tier of earnings, resulting in a lower benefit than someone with identical Social Security earnings, but no government pension would have received. With the windfall elimination provision now eliminated, the SSA is required to recalculate your benefit using the standard formula. For some people, this recalculation has already happened automatically, and they have seen an increase in their monthly payment. For others, the recalculation is still pending. And for a smaller group, the recalculation produced a smaller increase than expected because of errors in how the SSA recorded their non-covered pension information. If you know that your benefit was reduced by the windfall elimination provision, and you have not seen an increase in your monthly payment since January 2024, call the Social Security Administration and ask specifically for the status of your Fairness Act recalculation. Request a written statement explaining the calculation. You have the right to this information and to appeal if you believe the recalculation is incorrect.
On the earnings record review, I want to address the specific situation of women born before 1958 who changed their name following marriage, and who may have earnings recorded under a different name or a different Social Security number than they currently use. This is a more common issue than most people realize. Before electronic record keeping became standard, earnings were recorded under the name and Social Security number used at the time. A woman who married in her 20s, changed her name, and then worked under her married name for the remainder of her career, may have early earnings on record under her maiden name, and later earnings under her married name, both correctly linked to her Social Security number. But in some cases, particularly for women who married very young, or who had unusual employment circumstances, earnings from the maiden name period may not have been correctly linked to the current Social Security number. If your my Social Security earnings record shows unusually low or zero earnings for years when you know you were working, this is worth investigating. Contact the Social Security Administration and explain that you believe your earnings record may be incomplete for certain years. They can conduct a wage trace investigation to locate any earnings that may have been recorded under a different name or number and apply them to your current record. This process takes time, but can add meaningful earnings to years that currently show gaps.
On the delayed claiming and voluntary suspension options, I want to address the specific calculation that determines whether voluntary suspension is financially rational for someone in your situation. If you claimed early, say at 62, your benefit was permanently reduced by the early claiming factor. For someone with a full retirement age of 66, claiming at 62 reduces the benefit by approximately 25%. You receive 75% of your primary insurance amount. When you suspend your benefit at your current age, the suspension credits are applied to your current reduced benefit, not to your original full retirement age benefit. This is an important distinction. You are not restoring your benefit to what it would have been if you had delayed claiming originally. You are adding 8% per year in delayed credits on top of the already reduced base. Here is the calculation for a concrete example. A woman who claimed at 62 with a primary insurance amount of $2,000 per month receives $1,500. She is now 67. She has 1 year past her full retirement age of 66. If she suspends her benefit now and resumes at 70, she will add 8% per year for 3 years, which is 24% of her current benefit of $1,500. At 70, her benefit resumes at $1,860 per month. That is $360 more per month than she currently receives. Over 10 years, that additional amount totals $43,200. The cost is 3 years of foregone benefits during the suspension period. At $1,500 per month for 36 months, that is $54,000 foregone. The break-even point, where the higher resumed benefit has paid back the foregone amount, is approximately 12 and 1/2 years after the resumption date, or age 82 and 1/2. For someone who is 67 now and in good health, this calculation may or may not be favorable, depending on life expectancy and other income sources. But having the numbers in front of you allows you to make the decision with complete information, rather than incomplete information.
On the household coordination and survivor benefit strategy, I want to spend additional time on the specific situation of widows and widowers born before 1958, who have not yet claimed any Social Security benefit. If your spouse died and you have not yet claimed Social Security, you have a decision to make that involves two separate benefit amounts. Your own retirement benefit, based on your own earnings record, and the survivor benefit, based on your late spouse's record. The optimal claiming strategy depends on which benefit is larger and on the timing of claiming each one. Here is the strategy that produces the most lifetime income for most widows and widowers in this situation. If your own retirement benefit at 70 will be larger than the survivor benefit, claim the survivor benefit now and allow your own benefit to grow with delayed credits until 70. You receive income immediately through the survivor benefit, and at 70, you switch to your own larger benefit, which you will then receive for the rest of your life. If the survivor benefit is larger than your own benefit would ever be, claim your own reduced benefit now to begin receiving some income, and switch to the survivor benefit at your full retirement age when it reaches its maximum of 100% of your late spouse's primary insurance amount. The specific ages at which each benefit reaches its maximum are different. Your own retirement benefit maxes out at 70. The survivor benefit maxes out at your full retirement age of 66 for people born before 1958. Knowing both maximum amounts allows you to identify which sequence provides more total income over your expected lifetime. Call the Social Security Administration and ask them to run both scenarios for you. Ask for your own estimated benefit at 62, at 66, and at 70. Ask for the survivor benefit at 60, at 62, and at 66. With those six numbers, you can run the comparison and identify the optimal sequence.
I also want to address the Medicare connection for people born before 1958 because there is a Medicare premium issue that specifically affects seniors in this age group who had high incomes in their final working years. Medicare Part B premiums are based on your income from 2 years prior. For people who were still working in a high-income capacity in their early to mid-60s and retired in the past few years, the Medicare Irma surcharge may be adding $81 to $487 per month to their Medicare premium based on income they no longer earn. The fix is Form SSA-44, available at ssa.gov. Retirement is specifically listed as a qualifying life-changing event that allows Medicare to recalculate your premium based on your current income rather than the 2-year-old figure. Filing this form with documentation of your retirement date and current income can eliminate the surcharge immediately and save thousands of dollars per year in Medicare premiums. For a person born before 1958 who retired from a high-income position in 2023 or 2024. The IRMAA surcharge in 2025 and 2026 could be significant. Filing the SSA-44 form is a 30-minute task that can produce savings of $1,000 to $5,000 per year or more.
Let me close with the complete action list for people born before 1958. Review your Social Security earnings record at ssa.gov for any incorrect or missing years. If you find errors, request a correction with documentation. If you worked in public service with a pension and never claimed a spousal or survivor benefit, call 1-800-772-1213 about your Fairness Act eligibility this week. If you have not yet claimed Social Security and are past 66, calculate the benefit at 70 and compare it to claiming now. The 8% annual increase for every year of delay past 66 is real and permanent. If you claimed early and are past 66, ask the SSA about voluntary suspension and run the break-even calculation for your specific situation. If you are widowed, run the comparison between your own benefit sequence and the survivor benefit sequence to identify the optimal claiming order. If you retired in the past two or three years and your Medicare premium includes an IRMAA surcharge, file form SSA-44 to recalculate your premium based on current income. All of this information is public. All of these forms are free, and all of these actions can permanently increase your monthly income for the rest of your life. I will see you in the next one.