Navigating Social Security for Aging Parent

Transcript of Interview: “Navigating Social Security for Aging Parent”

Mike Barnes: If you want to get somebody really confused and hypnotized, just bring up the term Social Security because it’s so confusing for everyone.

Kim Barnes: It is really hard to understand, so we are going to an expert. We have Patricia Taylor with us. She worked for the Social Security Administration for more than 30 years. You have seen laws change, benefits change, all kinds of stuff, so we’re so glad for you to be with us today and hopefully shed a little bit of light.

Patricia Taylor: Thank you. Happy to be here.

Kim Barnes: We know that this is such a huge topic that we could never cover all of it in the time that we have today. But as we’re working with our aging parents and maybe we’re just becoming aware of their financial situation and not understanding why do you get this much for Social Security, or should you be getting this? What are the things that we need to be looking for first off?

Patricia Taylor: The first thing to look for is whether there have been any life changes. That’s critical. Any general life changes is what I would be looking for. If you can’t find those, I’d be looking to see if they have a current benefit letter and what Medicare they’re on.

Mike Barnes: So, look for that benefit letter which should spell out what they’re getting and why they’re getting it.

Patricia Taylor: Exactly.

Kim Barnes: But I think it’s so important for the kids, the adult children, to know where mom and dad get their money. Is it all from Social Security? Do you have a pension because you were a teacher or you worked for the government or something like that? You need to be open about it so that there’s no confusion later on.

Patricia Taylor: Right, because we want to be able to help them.

Mike Barnes: As far as other pensions are concerned, sometimes you might be able to find that information with their Social Security documents, but as a general rule, it will only be their Social Security information.

Kim Barnes: Okay, and we know that if they were a federal worker or if they were a teacher, a lot of times you’re not paying into Social Security during that time, so you’re not getting Social Security later, right?

Patricia Taylor: Yes, and a lot of people don’t understand that with Medicare, you have Part A, which is hospitalization, and Part B, which is your medical doctors. Part A, if you have worked and paid in and are covered, it’s free because you pay for that. Part B is the one that you pay a premium for, and that’s the one that you’re looking for a new plan every year.

Kim Barnes: Okay, so a lot of teachers or government employees who were not covered through marriage, they get their Medicare on their insured spouse.

Patricia Taylor: Yes, that’s how they’re getting it.

Mike Barnes: And maybe just to even clarify, because I know there was some confusion on my part, I didn’t even realize that you were sort of paying your Medicare benefits out of your Social Security. So, that is one thing just to be aware of. Like just recently, the rate people got a raise on their Social Security, but also Medicare went up.

Patricia Taylor: Yes. However, the brand new commissioner has gone to CMS, which is the new name for Medicare, to reduce that. It’s gone up to $170 this year, and he’s gone to them and asked them to reduce that because new drugs have been covered this year, and I guess that’s to offset their very expensive drugs. So, he’s gone back to them to ask them to reduce that premium.

Kim Barnes: And as you mentioned, talking about life changes, I know that when my mom’s second husband passed away, she went to Social Security to see what benefits she qualified for. Interestingly, which I had no idea, they pulled up his, but then they also pulled up my dad’s Social Security because he had already passed away. Even though they were divorced, she still ended up getting benefits from my dad because his was higher. It’s just so confusing.

Patricia Taylor: You get the higher benefit. Any Social Security rep will go in there and check to see which one’s higher, and there you go.

Mike Barnes: The marriage has to last for a certain number of years, though, correct?

Patricia Taylor: Yes, 10 years. That’s also another change. Back in the early 80s, they changed the requirement from a 20-year duration to 10.

Kim Barnes: Interesting. What do you see as the biggest mistakes and questions that people have with Social Security, not necessarily the elders, but the children who are trying to help their parents along?

Patricia Taylor: Up here, one of the biggest questions I have is about teachers in Texas. Austin Independent School District voted to stay into Social Security. The other school districts voted out, so teachers don’t pay in. However, there is a caveat to that law that says if you have your last day of earnings in covered employment, then they consider you covered. You can also work five out of the last 10 years of covered employment, and they will cover you. Kids don’t understand first off that their parents are not getting any benefits, or that they’re having to pay their Medicare out of their teacher retirement. They have not dug into it deeply enough to see that mom could have been covered. Even teachers who are not covered are not eligible for their spouse’s benefit either. It’s called a windfall elimination provision or government pension offset, so they don’t get their own or their spouse’s.

Mike Barnes: Where do you start to kind of figure all this out, to start unraveling each situation which is unique and a little different?

Patricia Taylor: If it were me, not even being a child, I would go to their earnings record first. I would go on to my account. It’s essential these days for everyone to have a My Social Security account. You can order your earnings record to make sure it’s correct, or you can look at your mother’s to see if where she worked is all correct. You can do all kinds of things in there.

Kim Barnes: So, start there. We were mentioning that I realized I remember we used to get something in the mail all the time around my birthday that said, “Oh, hey, here’s what you’ve paid in so far or what you might be eligible for when you’re 65.” You don’t get those anymore, so this is a way to go back and check your earnings. You just go to the Social Security Administration website and create an account?

Patricia Taylor: Yes, you go to ssa.gov, and then it will give you three free choices. You click the SSA My Account, and you go in there. It’s very secure, so it’s a bit of a bear to get into. Even when you come back, if you come back two weeks later, you still have to go through another verification process.

Kim Barnes: Better safe than sorry. You don’t want your Social Security number being compromised. What do you do if you find a mistake, or is there a statute of limitations for finding a mistake?

Patricia Taylor: There is no statute of limitations to keep you from correcting an error. However, it’s really important to do it because I’ve had people who come to file, I look at their record, and I’ll say, “Did you not work since 1970 through 1989?” They’re floored. They worked for an individual, the individual took their taxes out but did not pay them.

Mike Barnes: Wow.

Patricia Taylor: It’s good to check. And the longer it goes, the harder it is for you to still have that documentation.

Kim Barnes: Definitely. It’s a bear.

Patricia Taylor: The other issue is, same scenario, I look at it and say, “Did you make maximum earnings?” There’s a maximum amount of money that Social Security receives benefit of taxes from. If you make $500,000 and Mr. X makes $200,000, we’re taking the same amount of taxes. The benefits are relatively the same. The scenario I’m giving you is someone who comes in and says, “I did not make that money. I may have made $50,000, not $179,000.” What Social Security calls those are scrambled earnings. Someone used their Social Security card to work, and here are the earnings right on top of each other. You have to take them apart. It’s a mess, but if you don’t keep track of it, it can be a mess.

Mike Barnes: We’ve gotten a lot of questions from our group on Facebook. One of them was that her mom was getting benefits from her late husband, and all of a sudden, they just stopped. What do you do?

Patricia Taylor: Here’s a question for you. When you receive benefits from a late spouse, if you are eligible on your own Social Security record, let’s say he’s living, she’s getting hers, he’s getting his, hers are so high she can’t get a spouse’s. They’re both getting them, then he passes away. I’m assuming the scenario is that she filed as a widow.

Kim Barnes: In more generalities, if for some reason you just like something seems amiss, or you were getting money and you weren’t, do you just call Social Security and try to find out?

Patricia Taylor: I would call the 1-800 number. I thought I wrote that down, but it’s a 1-800 number. I’m sure it’s easy to Google and give them the scenario because that doesn’t sound too good. It sounds like maybe his death was not reported timely because his check would definitely stop.

Kim Barnes: If one of our parents passes away and the other one survives, we need to make sure that we go with that surviving parent to figure out what should be the new or revised norm.

Patricia Taylor: Yes, make sure to go and figure that out.

Mike Barnes: Does it matter where you live because our group is all over the country? Does it matter where you live because we had one person who’s in Minnesota and had a heck of a time figuring things out, came to Texas, and it was a little bit easier. Does it really matter where you are as far as when you have these Social Security questions?

Patricia Taylor: It should not because regardless of where you live, the Social Security law is the same. The only time we really pay attention to a certain state’s law is when we’re talking about legal separations and divorce decrees.

Mike Barnes: Even divorce decrees, this is a federal law. Some decrees say, “She’s not going to get my Social Security.” She is.

Kim Barnes: That’s so interesting. How do you know when it’s still time to push and keep asking, trying to go up the ladder if you will, when you’re not getting the answer that makes sense to you? When do you know, “Okay, we’ve exhausted all of our options and this is what it is”?

Patricia Taylor: When you hear three or four different answers from someone who supposedly knows what they’re talking about. That tells you there’s not a full understanding of the question or the answer. The answers to some questions are difficult. Social Security has this thing called to and through and in or. If you’re looking at a requirement in the policy that says through the date of entitlement, that’s through the whole month. If you’re looking at what this requires and it gives you several options, if it says or or or, then you only need one. If it says and and and, you need the whole list. If you’re talking to someone who doesn’t really understand stuff like that, you may be getting different answers.

Kim Barnes: Ask for a supervisor perhaps or get an expert like you who can help walk through the process.

Mike Barnes: If Mom or Dad is whoever the bigger breadwinner was, if Mom or Dad retired at 62, 65, or 67, when they’re still healthy and we’re not really worried about them, now they’re 80 or 85, is there going to be something where we look back and go, “Oh, things have changed a little bit because you retired at 62 as opposed to waiting until 65 or waiting until 67 or 70?” Does that affect things other than the dollar amount every month? Does it affect anything else we need to be worried about or watching for?

Kim Barnes: Are you almost saying like what are you advising them when they’re deciding when to retire? Is that what you’re asking?

Mike Barnes: Yeah, anything we should worry about in that respect.

Patricia Taylor: I’ll give you the rule of thumb that every claims representative uses. It’s called, if it takes you less than eight years to recoup the amount of the benefit lost by going early, you know there’s a difference between the low benefit and the high benefit. If it takes you less than eight to recoup, then you need to wait. It’s not financially advisable. If it’s going to take you more than eight years to play out the advantage of taking that money early, in some cases as long as seven years, if it’s going to take you more than eight years to recognize that, then take it and run. There are a lot of people who use familial longevity. “Oh, my family lives to 100. I’m not going to take that benefit. I’m going to wait until I’m 70.” We go through the rule of eight. My usual response is, “If you walk out that door and you’re hit by a bus, you get nothing.” Consider that. It’s not longevity. You could die tomorrow. You don’t need the benefit. Put it under your bed or in an account. Don’t use it. Let it grow.

Kim Barnes: That’s the one rule where you do use. As far as widow benefits, death benefits, anything like that other than the dollar amount, it doesn’t affect anything as you get older?

Patricia Taylor: No.

Mike Barnes: Okay, now when you’re talking about being 80 and 90?

Patricia Taylor: Very few things affect that unless you’re someone who’s married at 80 or divorces at 80. For someone who retires early, between that date of retirement and the date of attainment of full retirement age, now it’s close to seven or eight years, things can change. Work, death, remarriage, cutting back on work, going to work, making too much. The thing about it is, if you retire at 62 and decide at 64 to go back to work, we’re going to give you any benefit month that you never got paid. They give those back to you. They credit that back to you. Most changes are going to occur between the time of retirement age and full retirement age.

Kim Barnes: This is a lot.

Mike Barnes: Yeah, it is a lot.

Kim Barnes: We’ve just kind of scratched the surface.

Mike Barnes: It’s been an extra-long interview, and it’s still barely scratched the surface. Thank you so much for all of the answers, and I’m sure there will be many more questions along the way.

Kim Barnes: Did we look at everything? There’s one other thing I wanted to ask you about.

Patricia Taylor: Sure.

Kim Barnes: Screen account, working while entitled, Medicare, and survivors, we hit them all.

Mike Barnes: That’s a lot, and it’s still just the beginning. We just so appreciate your time because I think it just helps people get a sense of what are the things that we need to be listening for, questions to ask, and things like that. Thank you so much.

Patricia Taylor: You’re so welcome, anytime.

Kim Barnes: My head’s spinning just a little bit.

The real benefit of this is just if you hear something that you think, “Oh, wow, I’ve heard Mom say that or Dad say that, and maybe I need to look into that a little bit more.” It at least gives you the confidence to know that, yes, this is something to look into. Whether it’s calling Social Security and hoping that you’re not on hold too long or getting an expert to help you who can really help you navigate the system, there are ways to be able to try to hopefully get those answers. 

Mike Barnes:  Look into things. That’s the biggest thing. If you have any other topics you’d like us to dive into, let us know. Parenting Aging Parents.

*This transcript is auto-generated. Please excuse any typos or mistakes.