Q: I am 73 years old. I never signed up for Social Security because I just never needed it. I am fortunate enough to be independently wealthy. I inherited a multimillion-dollar business from my father, who had inherited it from his father. We have way more than enough money to live comfortably for the rest of our lives, and to provide nest eggs for our children and grandchildren. So again, I just don’t need the money. However, my wife keeps encouraging me to file for my Social Security. But my thinking is that since we don’t need the money, I should let it stay in the Social Security funds and it can be of more use for other, less-fortunate Social Security recipients. I’d like your take on this.
A: That certainly is noble thinking on your part. But honestly, it’s just a little misguided. Your monthly Social Security benefit would be about $3,000 per month. That’s a lot of money. But it’s dwarfed by the magnitude of the trillion-dollar Social Security trust funds. Your benefits are such a teeny tiny drop in the Social Security bucket that letting your money remain in those funds really has no effect and does nothing “for other, less-fortunate Social Security recipients.”
Throughout my 40-plus years of working on Social Security issues, I’ve run into about a half-dozen other folks in your situation. And I’ll recommend to you the same thing I recommended to them. Sign up for your Social Security benefits, and once the checks start rolling in, do something creative with the money.
Maybe send a monthly check to your favorite charity. Or perhaps you could put a large chunk of money in your church’s collection plate once a month. I know of one guy who takes his Social Security check each month and buys a savings bond and gives it to one of his many grandkids.
Or do what another fortunate soul like you is doing. He wrote to me about 10 years ago with a similar story, and I suggested the same advice. Ever since, he’s used the money to fund a scholarship that he hands out to lucky high school seniors in his town.
Or, of course, you could just keep the money yourself and do whatever millionaires do with a $3,000-per-month bit of throwaway money!
Q: My dad is 85 years old. He never signed up for Social Security. He worked for the VA and gets a government pension and he also gets free medical care from the VA. So he doesn’t need Medicare. Before and after his VA career, he worked at jobs covered by Social Security, so he has his 40 quarters. He says he doesn’t need Social Security. But I think he should sign up. Is it too late for him to apply? If it isn’t, can he get retroactive benefits? And what about Medicare?
A: It’s never too late to apply for Social Security. So your dad can, and he definitely should, sign up for benefits as soon as possible. Based on what you said about his working career, he won’t be due much from Social Security.
My guess is maybe about $200 per month. But still, $200 is way better than nothing. Sadly, he’s already thrown away thousands of dollars. And every month he waits, he’s throwing more money away. The most he can get in retroactive benefits is six months’ worth.
As far as Medicare, your dad has been taking a chance all these years by never applying for the program. I understand he gets his free medical care from the VA. But if he is ever in a place or a situation where he needs medical care and a VA hospital or clinic isn’t available, he’s out of luck. Still, it would be prohibitively expensive for him to apply for Part B Medicare now. (That’s the part that pays for doctor’s visits, lab work, and all other non-hospital expenses.) He’d have to pay a 10 percent per year compounded monthly premium penalty for each of the last 20 years. That would make Part B just way to expensive for him. But Part A coverage is free. (That’s the part that pays inpatient hospital bills.) He should sign up for Part A at the same time he applies for his Social Security benefits. That way, if he ever needs hospitalization and can’t get to a VA hospital, he will be covered by Medicare.
Q: There is an 88-year-old lady at our church whom I just met. She is living on a rather small Social Security check because she never worked very much outside the home. Her husband died about 15 years ago. She said after he died, she got the burial benefit from Social Security and nothing else. She claims she thought she was also filing for widow’s benefits, but nothing ever came of it. She never followed up on this and has been content living on her meager Social Security check. Is it too late to file for widow’s benefits? Can she get any back pay?
A: As I said in the answer to the last question, it’s really never too late to file for any kind of Social Security benefit. So even though she should have filed for widow’s benefits 15 years ago, she certainly can still do so now.
Assuming she is eligible for those benefits, she will be able to claim six months’ worth of retroactive benefits. Any Social Security claim filed after age 66 comes with that back pay guarantee.
And normally, that six-month check would be all she gets. But if she can show that the Social Security Administration made a mistake by not paying her widow’s benefits that she was due, she could possibly collect 15 years’ worth of retroactive benefits.
Showing that SSA made a mistake is normally hard to do. Lots of times it’s a “he said, she said” situation that’s almost impossible to prove. In other words, had she merely inquired about widow’s benefits and claims she was told she was not eligible for such benefits, it would be hard for her to prove she was misinformed.
But her situation is different. In sounds like she filed a formal claim for the $255 death benefit. By doing so, it would have been SSA’s job to explore her eligibility for widow’s benefits. If they dropped the ball on that claim, that proves the agency made a mistake and she should be able to get 15 years of back pay.
