Don’t waste money on Social Security scam

Q: There is publicity on the Internet and Facebook about changes coming soon to Social Security. I read their ads, but they eventually say that further details can be learned only by buying a book for $5. I am receiving Social Security and have not gotten official notification. Is this a scam to sell a book or is it for real? Please advise.

A: Before I dive into the nitty-gritty, let me give you this quick advice right off the top: Don’t give this matter another thought. From what you have told me, it has absolutely nothing to do with you.

What you’re seeing are schemers trying to make a quick buck by scaring the elderly into thinking their Social Security benefits are at risk unless they order important information that the government is trying to hide. From the ads I have seen, they’ve taken something with a grain of truth and blown it out of proportion to lure seniors to send in those $5 checks.

Here’s the bottom line: If all you do is wait for your check to arrive each month and if you’re planning no changes to that routine, you will not be affected one iota. It’s that simple. Now, the details:

Yes, changes to Social Security were made in the Bipartisan Budget Act of 2015, which became law last Nov. 2. And, yes, those changes will take effect May 1. But these changes affect only future beneficiaries who are looking to take advantage of three benefit-maximizing strategies that I’ll bet you probably have never heard of.

One change involves the “file-and-suspend” strategy. Currently, when I reach full retirement age (66), I can apply for benefits and immediately suspend them. Then, my wife could apply for and receive spousal benefits while my own deferred benefits would continue to increase by 8 percent per year until I started to collect at age 70.

Under the new rules, my wife will be unable to receive benefits unless I’m getting them, too. However, if you are 66 or will turn 66 by April 30, you can still take advantage of this strategy, and you will be grandfathered in.

Another change will eliminate what are known as “restricted applications.” These allowed people who are between full retirement age and age 70 to claim spousal benefits while deferring their own benefits, which again would grow by 8 percent until age 70. Then, at age 70, they’d switch from spousal benefits to their own larger benefit.

From now on, spouses at the time they apply must accept either spousal benefits or their own benefits, whichever is larger. They no longer can change their choice at age 70 to take advantage of their deferral of benefits. However, those who will turn 62 by the end of the year will be grandfathered in under the old rules for restricted applications.

Finally, the changes will eliminate another ingenious strategy that allowed recipients to hedge their bets. Through this scheme, I could apply for benefits at, say, age 66 and then immediately suspend those payments. Because I have chosen to defer benefits, they will continue to grow by 8 percent until age 70, at which time I could start drawing my maximum amount.

But let’s say I run into financial difficulties or a life-threatening illness at age 68. Under the current system, I can unsuspend my benefits. I will lose out on those two annual 8-percent increases, but I will receive a lump-sum check for all the monthly benefits I would have received during those two years. Then, my checks would continue at the same rate I would have received had they started when I was 66.

Under the new rules, those hefty lump-sum checks have been eliminated. If I choose to start receiving benefits at age 68, I will receive only monthly checks that include those two 8-percent increases. There is no longer an advantage to applying for and immediately suspending benefits.

By now, I hope you can see that there is no “hidden radical reform that threatens the financial security of as many as 21.3 million Americans.” The new rules apply only to retirees in their 60s or those nearing retirement who were looking to take advantage of the law as it was written to maximize their benefits. The idea was to save Social Security a few bucks, and, not surprisingly, the changes have upset those who were looking to take advantage of them. For all others, they do not change any core benefits or payment levels.

So, I’d take that $5 and go see a movie today at the Fairview Heights Wehrenberg. You’ll have $3 left over and you’ll avoid cursing at a worthless book that you’d wind up tossing.

Q: What has happened to April Simpson on KTVI-FOX2? I know she took a sabbatical to have a brain tumor treated. Is she sick again?

A: Unfortunately, this may be more a case of setting one’s mouth into motion before putting one’s brain into gear.

According to Kevin Eck at TVSpy.com, Simpson was given a two-week suspension in mid-October for undisclosed reasons. Then, just four days after returning, she reportedly referred to a KTVI intern, who is part Asian and part black, as “Black Leroy,” the name of a character in the 1985 movie “The Last Dragon.”

The intern objected and, after arguing with Simpson, reported the incident to the station’s human resources department. Although Simpson said she was referring to the intern’s physical resemblance to the movie actor, not his racial makeup, the station let her go without comment shortly after the Nov. 6 dispute. On the plus side, her Twitter feed says she recently had a clean MRI and was the guest of honor at a festive farewell and fundraiser for brain cancer survivors on Jan. 16 at Sweetie Pie’s.

Today’s trivia

What country has a town called Spa that became the popular word for “health resort”?

Answer to Jan. 17 trivia: When President Warren G. Harding died suddenly on Aug. 2, 1923, Vice President Calvin Coolidge was visiting his family home in Vermont, which had no electricity. So by kerosene lamp, Calvin Coolidge Sr., a notary public, administered the oath of office to his son at 2:47 a.m. Aug. 3, thus becoming the only father to do so in the nation’s history. The next day, Calvin Jr. returned to Washington, where Judge Adolph Hoehling Jr. of the Supreme Court of the District of Columbia re-administered the oath to avoid any controversy.

This story was originally published January 26, 2016 at 3:02 AM with the headline "Don’t waste money on Social Security scam."