Social Security's Failures Led to Millions in Missed Benefits
Key Points
Social Security failed to alert some workers to benefit options, costing them millions.
Retirees need to understand their own benefits eligibility and make informed choices.
Many seniors rely heavily on Social Security benefits to make ends meet. That's why it can be so upsetting not to get all the benefits you deserve.
Unfortunately, thousands of retirees may have missed out on millions of dollars in benefits due to them -- and it's all because of failures by the Social Security Administration.
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The SSA's oversight left Social Security retirees with less
An audit from the inspector general of the Social Security Administration earlier this year highlighted an oversight that likely led to millions of older Americans not getting the benefits they deserved.
The inspector general's report revealed that employees at the Social Security Administration did not inform widow and widower beneficiaries that they had the option to claim survivor benefits only and to delay their claim for retirement benefits.
If widows and widowers had been properly informed of this option and claimed those survivor benefits instead of starting their retirement checks, they could have had Social Security income to live on while leaving their retirement benefit to grow.
Benefits can increase for each month you wait until age 70, because you avoid early filing penalties before full retirement age (FRA) and earn delayed retirement credits post-FRA until 70. Some widows and widowers missed that chance, though, because Social Security is complicated, and the administration workers didn't provide them with the proper information about all of their options.
How much did widows and widowers lose?
The report estimates that around 5,367 widows and widowers would have received extra benefits if they'd been told they could claim survivor benefits alone. The total financial loss because of this oversight was estimated at $113.8 million.
That's a lot of money to lose, especially given that many people don't have a ton of extra funds in their retirement plans, and those who lose spouses are even more likely to face financial insecurity. Missing out on the chance to boost their own benefits also means that the affected retirees will get smaller Social Security cost-of-living adjustments (on a dollar-for-dollar basis) for life since these are calculated as a percentage of benefits.
This unfortunate incident shows that no one should count on the Social Security Administration for a full picture of benefits or to provide guidance on when to claim Social Security.
When doing your retirement planning, you should research your options independently, make sure you understand all the details of how Social Security works, and take control of your own claiming choice so you don't leave money on the table.
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