Social Security and You: Social Security Clickbait
Social Security Clickbait
I'm sure you've seen these teaser links on the internet that sometimes can be too irresistible to ignore. They have catchy titles like "20 celebrities who have a secret past" or "10 common foods that will kill you." This is called "clickbait." Essentially, it's a form of false advertisement designed to entice people to follow a link to read or view some content that is disingenuous at best and totally misleading at worst.
Well, here are a couple examples of Social Security clickbait I saw online just this morning: "Three Social Security secrets no one knows" and "The secret to how you are losing out on $3.4 trillion in Social Security."
Do you notice a common theme? The key word is "secret." I guess secrets sell. But when it comes to Social Security, there really aren't any secrets. There might be some information of which you are not yet aware. But all of that information is readily available, from places like the Social Security Administration website (www.socialsecurity.gov), a local financial planner or from reading this column.
And frequently, the so-called secrets are just bits of information with which most people are already familiar. For example, here are those "three Social Security secrets no one knows." One: Your benefits are reduced if you take them before full retirement age. Two: Your benefits are increased if you delay filing until after your full retirement age. Three: There is no point in delaying benefits beyond age 70.
The reduction for early retirement is pretty straightforward and relatively modest. It is roughly one-half of 1% for each month a Social Security check is taken before full retirement age. But here is an interesting and revealing point. The clickbait site says your benefit is "slashed" if taken early.
The site also says you get a "generous" increase if you delay your benefits until after your full retirement age. The delayed retirement credit you get is actually two-thirds of 1% for each month you wait after FRA.
And why do these clickbait sites exaggerate the downside to early retirement and overplay the upsides to delayed retirement? Because almost all of them have one goal: to get you to wait until age 70 to start your Social Security.
To illustrate this further, let's recall that other clickbait come on -- "The secret to how you are losing out on $3.4 trillion in Social Security." Well, the author of that website used some very dubious math to figure out that all retiring baby boomers in this country will be losing out on combined benefits of $3.4 trillion if they don't wait until age 70 to start their Social Security checks.
So I guess my wife and I have missed out on part of that $3.4 trillion because we both took our Social Security benefits at 62. I've discussed our reasons for doing this many times in this column. We decided to grab our benefits early because we wanted to have fun spending that money before we got too old to enjoy it.