A month before my husband Mike turned 66, he received a letter from the Social Security Administration reminding him that he could start receiving unreduced retirement benefits at his full retirement age, even if he continued to work, or he could earn an extra 8% per year by postponing his benefits up to age 70.
"The easiest way to apply is by going online at www.socialsecurity.gov/retireonline, our secure website," the letter said. "You may apply for retirement benefits up to three months before the month you want your benefit to start."
There is a reason Social Security is encouraging people to apply for benefits on line. The agency's budget has been cut by about 11% on an inflation-adjusted basis since 2010, leading to long waits on the phone and in field offices just as demand for service is reaching record highs as aging baby boomers retire.
Since the end of fiscal year 2016, SSA lost over 1,000 field office staff, bringing the total loss to 3,500 employees since 2010, Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, said during a recent hearing of the House Ways and Means subcommittee on Social Security.
"Under the funding level for FY2019 proposed by the Trump Administration, those losses would increase by another 1,000 staff," he said.
Subcommittee chairman Sam Johnson, a Texas Republican, called the hearing to highlight the fact that the Social Security Administration has gone without a Senate-confirmed commissioner for five years — the longest time of any federal agency.
"While Acting Commissioner Nancy Berryhill has done an admirable job, at the end of the day, the acting head of an agency is just that: acting," Mr. Johnson said.
"Important decisions are being put off and service is deteriorating because this agency is lacking a leader," the chairman added.
Mr. Richtman noted that budget reductions have taken a toll on customer service. "Field offices must serve nearly the same number of visitors with far fewer staff available for doing so," he said. "In some offices, seniors are required to wait weeks for an appointment to file a claim while those who come to an office without having an appointment may wait for hours to speak to an agent." In 2017, the agency's 1,200 field offices served 42 million visitors.
The situation is no better for those who try to get answers from Social Security over the phone. Last year, 36 million people called the agency's toll-free telephone number (800-772-12130). "The majority of callers give up without even getting through," Mr. Richtman told the committee.
In 2010, each caller waited about three minutes to speak to an agent. Currently, the average wait is about 20 minutes. To illustrate his point, Mr. Richtman told the panel that he dialed the Social Security hotline at the beginning of the hearing on Wednesday and 25 minutes later, he was still on hold. A recorded message said his wait would be about an hour.
For many of those who apply for Social Security disability benefits, the wait can be interminable. Although the average processing time for initial claims has held fairly steady at about three to four months, many initial applications are denied. The next step in the appeals process is to appear before an administrative law judge who decides the case.
"Currently, over one million individuals are caught in this backlog and each will wait over 600 days, on average, for a decision," Mr. Richtman said.
"Some applicants will lose their homes or have to declare bankruptcy while waiting for a decision on their appeal," he said. "Many will experience a decline in health and unfortunately, some will die." An estimated 10,000 individuals died in fiscal year 2017 while waiting for a decision.
So what is a financial adviser to do? Help your clients make the right Social Security claiming decision for their personal situation before they contact Social Security. And when it comes time to claim retirement benefits or benefits as a spouse, urge them to file their application online. Social Security has a checklist of the documents they will need to apply for benefits.
Surviving spouses and surviving divorced spouses need to apply for survivor benefits over the phone or at their local Social Security office. They should call for an appointment in advance to reduce their wait time at the field office.