Social Security Scams Continuing to Steal From Victims

Con artists are always developing new scams, and while Social Security is their primary bait right now, don’t be surprised if they switch to a new tactic. One critical thing to be aware of: Social Security will send you a letter, if there is any kind of problem with your account, says Forbes in the article “Beat The Latest Scams to Steal Your Identity and Social Security Benefits.” You will never get a phone call from Social Security demanding that you purchase gift cards.

Not so long ago, scammers were telling their victims that they were from the IRS and needed immediate payment. That scam, which was traced to call centers in India, is now greatly reduced and many of the perpetrators have been arrested.

However, every time one scam gets shut down, two others spring up to take its place.

The Social Security scam is hitting cities and towns nationwide. The caller says that the person’s Social Security number has been suspended due to fraudulent activity involving the number. The scammer says that the person being called must take immediate action to have their number reinstated.

Sometimes the caller is belligerent and nasty. Other times, a softer tone is taken, and the caller says they need only to confirm the person’s Social Security number, because the computers are down and their help is needed, so the account is not suspended. Another scam comes in via email, requesting that the person click on a link and follow the instructions to provide their Social Security number.

Regardless of the form of contact or the approach, the scammer’s goal is to get your Social Security number, other personal information and gift card numbers that are swiftly transformed into cash.

The Social Security Administration and the Federal Trade Commission have both advised that neither organization will call or email people under either of these circumstances. If Social Security finds a problem, you’ll receive a letter.

Social Security does send emails from time to time to remind people to review their benefits statements and check to make sure their earnings history is correct. These emails only arrive, if you have established a “my Social Security” account on the government website.

To be safe, don’t click on any links from any emails about Social Security. The email address, just like the caller ID on your phone, could be spoofed. To check your earnings history, go to the Social Security website on your own computer. You can also call the local Social Security office, or the national 800-number.

Another scam can occur, if spammers do get your Social Security number, which sadly is available for sale online. They will open your “my Social Security” account in your name and change the address and the financial account where benefits are deposited. If you aren’t already receiving benefits, they apply for your benefits and have them directed into the scammer’s accounts. It’s best to open up a “my Social Security” account of your own, even if you don’t plan on collecting benefits for several years.

On that account, you’ll be able to check your benefits, earnings history, and see if anyone else has applied for benefits in your name or tried to change the financial account where your benefits are deposited. It’s a good idea to log into your account every few months to see if there’s been any activity, especially if you are at least 62 and don’t plan on applying for benefits for a while.

Reference: Forbes (August 14, 2019) “Beat The Latest Scams to Steal Your Identity and Social Security Benefits.”

Be Aware of These Myths about Social Security

Despite everything written about filing for benefits as late as possible, more than half of seniors apply for Social Security before they reach full retirement age. It is now 66 and will rise to 67 for people born in 1960 and later. More than a third of all Americans apply as soon as they possibly can—at age 62. Only one in twenty-five applicants puts off filing to age 70, when monthly benefits max out, says the Washington Post in the article advising readers “Don’t believe these Social Security myths.”

Some people have no choice and must take their benefits early, because they’ve lost their job and have no savings. Others have better options, but they aren’t aware of them. That’s because of the many myths about Social Security. A survey found that while 77% of Americans thought they were pretty smart about Social Security, 95% couldn’t answer eight basic questions about the program.

Let’s look at these myths.

It doesn’t matter when I take Social Security. Benefits increase by about 7% every year from age 62  to your full retirement age, and then by 8% each year between full retirement age and 70. This is a planned adjustment to ensure that people who opt for a larger check for a shorter period don’t receive more than those who file earlier and receive smaller checks. It’s better to delay, both for the larger check and the benefits that the surviving spouse receives. People who live longer can run out of savings, so having a larger check in your 90s could make a huge difference.

If I don’t expect to live a long time, I should claim benefits early. Most of us underestimate our life span. A 65-year old man today can expect to live to 84, and a 65-year old woman can expect to live to 86.5. Life expectancies are even longer for those in their mid-50s. However, here’s the thing: even if one spouse doesn’t live as long, by taking Social Security earlier, their spouse will have a smaller benefit. Married couples lose one of their checks when the first spouse dies, causing a big drop in income. The survivor receives the larger of the two checks the couple was receiving. Therefore, the higher earner in a couple, whose check will be larger, should delay taking benefits, if at all possible, to benefit the surviving spouse.

I can claim benefits early and invest the money to come out ahead. No investment today offers a guaranteed return as high, as what can be obtained from delaying benefits. You’d have to take a lot of risk to get close to the 7% or 8% guaranteed by Social Security.

As soon as I stop working, I have to file for Social Security benefits. Not true. You don’t have to file for Social Security benefits until you want to. Even delaying four years, from 62 to 66, can translate into a sustainable 33% increase in your standard of living.

I better apply before Social Security runs out of money and closes down. This myth becomes more widespread every year. If Congress doesn’t act, which is unlikely, by 2035, the system will still be able to make payments, although they may be curtailed by 20%. Eighty percent of your Social Security check is not zero. It’s also more than likely that Congress will address Social Security fixes.

Reference: Washington Post (June 10, 2019) “Don’t believe these Social Security myths”

How Do I Know When to Start Social Security Benefits?

There’s so much advice flying around about when to claim Social Security benefits that it can be confusing. Sometimes, it makes sense to claim earlier than age 70. Sometimes it does not, says The Beachcomber News of Brigantine in the article “When to claim Social Security.”

How’s your health? The longer you expect to live, the longer you should wait to claim benefits. The break-evens for age 62 vs. 66 are ages 78 and 79. The break events for 66 vs. 70 are ages 82 and 83. It’s not to say that you must wait if you think you are going to live for a long time, because there are other factors that should be considered.

How much money do you have saved for retirement? The more money you have been able to save over the course of your career, the longer you can potentially delay taking Social Security. Every year that you don’t collect benefits, your monthly benefit grows by 8%. That’s a terrific increase, and one you won’t get in many other places. Don’t overlook this advantage. However, if you haven’t saved a lot, you may not have a choice and have to take your benefits earlier.

What about your spouse’s benefits? What your spouse can expect to receive in benefits may have an impact on your decision about when to take your own benefits. This includes ex-spouses, by the way, if you were married for more than 10 years and have not remarried.

Your lifestyle now and your lifestyle in the future. Think about what’s more important to you and your spouse: getting a higher total monthly benefit by waiting to claim Social Security at age 70, or getting a smaller benefit now? Again, if you need the income and can’t wait, that’s your answer. However, if you expect to live a long, active life, you may want to wait. What is your plan for your retirement’s early and later stages? There are stages to retirement and retirement spending. In the early stage, people to tend to have a more active and costly lifestyle. As aging progresses, most people spend less.

What will your spouse need in the future? What if your spouse outlives you? This is especially important, if one of you has been the high-income earner. When one of you dies, the survivor will get the higher of yours or their Social Security benefits, not both. If you want to maximize the surviving spouse’s benefit, then you may want to consider waiting, so that they will receive a larger benefit for the rest of their life.

These are issues that can be discussed with your estate planning attorney when you are working through your estate plan. How will your Social Security benefits work with your retirement income plan, and how will distribute your assets for the benefit of your spouse and children?

Reference: The Beachcomber News of Brigantine (May 29, 2019) “When to claim Social Security.”