10 Social Security rules that are insane

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Photo by by Justin Sullivan/Getty Images.

Photo by by Justin Sullivan/Getty Images.

Social Security rules are complicated and change often. For the most recent “Ask Larry” columns, check out maximizemysocialsecurity.com/ask-larry.


Boston University economist Larry Kotlikoff has spent every week, for over two years, answering questions about what is likely your largest financial asset — your Social Security benefits. His Social Security original 34 “secrets”, his additional secrets, his Social Security “mistakes” and his Social Security gotchas have prompted so many of you to write in that we feature “Ask Larry” every Monday. Find a complete list of his columns here. And keep sending us your Social Security questions.

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Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version. His new book, “Get What’s Yours — the Secrets to Maxing Out Your Social Security,” (co-authored with Paul Solman and Making Sen$e Medicare columnist Phil Moeller) was published in February by Simon & Schuster.


As some of you know, I just published a book with Paul Solman and Phil Moeller (a long-time personal finance columnist) called “Get What’s Yours — the Secrets to Maxing Out Your Social Security.”

We’ve been delighted by the interest in the book. But, in retrospect, we should have called it “Fifty Shades of Green” because there are now four different editions of “Fifty Shades of Grey” atop Amazon’s best-seller list — where we aren’t. Clearly, sex is sexier than money.

Social Security book cover

Anyway, we tried to make “Get What’s Yours” a fun and easy read, as last week’s column hopefully demonstrates.

One of the funny, as well as deeply troubling, things in the book is this list of 10 quotes from Social Security’s main rulebook, the Program Operating Manual System.
Each is preceded, in bold, by a header written by Phil, with finishing flourishes from Paul.

Albert Einstein came up with the best-ever definition of human insanity: “Doing the same thing over and over again and expecting different results.” The rules below offer, at least in my view (I don’t want to implicate Paul or Phil), a good definition of institutional insanity.

Anyway, here’s the list.

The Deck May Seem Slightly Stacked
“Even if we caused the (benefits) overpayment, you must show that you are without fault.”

You Can Actually Die Twice
Cash benefits for disabled workers end “the month before the month you die.”

Department of Circular Definition
“What does ‘actually paid’ mean? Actual payment occurs when you are actually paid.”

Catch the Address on That Coffin?
“The lump-sum payment cannot be paid on the earnings record of a worker who dies in or after the month we receive notice of deportation or removal.”

And Social Security Would Know This How?
“Third parties may assist a claimant when completing the (online) application, but the claimant must be present to select the ‘Submit Now’ button.”

We’ll Report That Income Right Away
“The illegality of an activity does not prevent it from being a trade or business. For example, professional gamblers, bookies, etc. may be engaged in a trade or business. If you’re in this category, you are considered self-employed and are required to report your income and pay self-employment taxes.”

The Fat Lady Never Sings I
“We may always make a new initial determination whenever a change occurs in the factual situation despite how much time elapses from the date of that change.”

The Fat Lady Never Sings II
“The fact that we determine that a claimant meets the requirements for entitlement does not preclude us from making another determination that the claimant no longer meets those requirements at some subsequent date.”

The Case of the Missing Corpse
“In a disappearance case where the body is not recovered, you must clearly prove the death of the missing person. Submit all available evidence, including: statements of persons having knowledge of the situation; (or) letters or notes left by the missing person that have a bearing on the case.”

The Department of Really, Really Helpful
Social Security representatives are instructed: “Do not attempt to explain the rationale for any particular operational guidelines, nor go to any great lengths to justify them.”

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