How Social Security denied one woman the advice she deserved

Social Security rules are complicated and change often. For the most recent “Ask Larry” columns, check out

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.

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 of Maximizing Your Social Security Benefits,” (co-authored with Paul Solman and Making Sen$e Medicare columnist Phil Moeller) will be published in February by Simon & Schuster.

How Do Disability Beneficiaries Proceed at Full Retirement Age?

As I’ve written, based on what I learned from former Social Security technical expert Jerry Lutz, disability beneficiaries have two options when they reach full retirement age.

The first is to do nothing and have ​your ​disability benefit automatically convert to your retirement benefit. If ​you​ have a spouse or an ex-spouse on wh​ose earnings record ​​you​ can collect spousal benefits, taking this course of action, actually inaction, will mean ​your​ full spousal or full divorced spousal benefit will be automatically converted into ​your​ excess spousal or excess divorced spousal benefit.


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Your full spousal benefit is half of the full retirement benefit of your spouse or ex-spouse. Your excess spousal benefit is your full spousal benefit less 100 percent of your own full ​retirement benefit ​inclusive of​ any increase​ due to delayed retirement credits obtained by suspending your retirement benefit​ after full retirement. Thus your excess spousal benefit is smaller, generally far smaller than your full spousal benefit. Indeed, your excess spousal benefit can be negative, in which case it is set to zero.

And, this nasty gotcha – having your full spousal or full divorced spousal benefit potentially disappear​ just because you filed for your retirement benefit (or were automatically filed for your retirement benefit thanks to Social Security’s automatic conversion of disability benefits) – can’t be undone by suspending your retirement benefit. Even while your retirement benefit is suspended, your spousal benefit will still be based on the excess spousal benefit formula. So it’s the filing, voluntary or forced, for your retirement benefit that plunges you into excess benefit world, not your actual collection of your retirement benefit.

The second option when you reach full retirement age​ is to file a withdrawal request form (SSA-521) stating the following: “I wish to withdraw the conversion from disability to retirement benefits that would otherwise occur at full retirement age, per section B.4 of POMS GN 00206.005.” POMS stands for Social Security’s Program Operating Manual System — in other words, Social Security’s definitive rulebook.

In filing this form (and you can do so up to four months before reaching full retirement age ​and 12 months after reaching full retirement age), you gain the option of filing just for your full spousal or full divorced spousal benefit at full retirement age and waiting to ​file for your own retirement benefit​ until, say, age 70, when it will be 32 percent higher (after inflation) than your current disability benefit.

A Case Study in Social Security’s Incompetence

N​ow for the distressing case study. On March 8, I received an email from a lovely 65-year-old disabled divorcée, whom I will call Ann to protect her identity, asking me how to maximize her remaining lifetime benefits. I emailed her about the second option and told her to take it.

To review, I suggested she withdraw the conversion of her disability benefit to her retirement benefit, file just for her full divorced spousal benefit, and then, at 70, file for her own retirement benefit. Given her own work history and that of her ex, this strategy would produce significantly more benefits.

Ann visited her closest Social Security office in Holyoke, Massachusetts, this past June and was told she could not follow option two. That’s not true.

She was later told that she could do this, but for her to collect higher benefits at age 70 she would need to go back to work during those years. That’s not true either. I asked Jerry Lutz, the former Social Security technical expert who double checks all my Making Sen$e columns, to send her the regulation that permits option two (B.4 of POMS GN 00206.005), which states, in its entirety:

In cases involving automatic conversion (e.g., DIB to RIB conversion at FRA, wife’s benefits converted to mother’s benefits without an additional application), if the beneficiary requests in writing not to receive the new benefit, treat the request as a request for WD. Approve the request if the conditions for approval of a WD are met, regardless of whether the conversion has been made.

Jerry and I both encouraged Ann to go back to Social Security and tell them to read this provision. Ann went to the Springfield, Massachusetts, Social Security office, hoping ​that office would actually know and follow the law. Here’s her description of what happened:

Dear Larry and Jerry,

Well, I just came from the SS office [in Springfield], having printed out all the material you both so kindly gave me some months back. The SS agent, a young man, read through your written advice carefully and finally said it could not be done ​– ​that Disability benefits are, in effect, Social Security benefits​ –​ but ​that ​he would check with his “specialist” while I waited.

He came back and dropped a bomb in my lap: yes, I could do this (suspend my disability conversion to SS just before [my Full Retirement Age of] age 66 and take half my ex’s SS and then at age 70 file for my own), but I would have to repay everything I’ve gotten so far in disability payments first! For me that would mean perhaps $40–$50K! Since this payback aspect wasn’t included in your advice to me (and not addressed in Larry’s column that used me as an example that this could be done), I’m mighty perplexed.

So is this true — I would have to do the entire payback to adopt my plan? Thanks to you both again,


I wrote Ann back explaining that the Social Security staff at the Springfield and Holyoke offices had this wrong. Jerry wrote as well, saying, in part:

Unfortunately, supervisors at SSA aren’t appointed based on their technical expertise. Please make sure that the title of the person(s) whose name you get is either Technical Expert or Office Manager. Repaying all of the benefits you’ve received would be required if you were withdrawing your claim for disability benefits. That is NOT what you are doing. You are withdrawing the conversion from disability to retirement benefits that would normally occur at age 66. You are permitted to do that per POMS GN 00206.005. You haven’t yet received any retirement benefits, so there is nothing for you to repay. It’s really as simple as that.

If I were you, I would already have contacted my Congressperson about the problems that you are having. They would make an inquiry on your behalf, which would receive the attention of the most knowledgeable people in your local office.

Yesterday, I spoke with Ann on the phone. She told me that based on Jerry’s advice, she went ahead and called her closest Social Security office (Holyoke) and requested to be connected with a supervisor, whom she asked to patch her through to a technical expert.

According to Ann, the supervisor​ pulled up her record of inquiry at the two Social Security offices and chastised her for visiting a second office. The supervisor also told Ann, who cannot easily come into the office because of her disability, that she could not speak with a technical expert over the phone. She would have to come back to the Holyoke office (for her third Social Security office visit on this matter) and essentially begin again with an intake staffer, showing a printed copy of the POMS section Jerry provided as “proof.” If the intake staffer decided the case merited an expert, she could see an expert. This, of course, amounted to telling Ann to redo exactly what she had done in June with the same expected outcome.

Ann has now contacted Rep. Richard Neal, and is waiting to hear from his office. I promised Ann that I will keep writing about her situation until Social Security gets it right. I will keep you, my readers, posted on the outcome. But the main reason I’m writing about Ann’s story is ​to advise you to be as tenacious as possible if you want to get what’s yours from Social Security.