After filing benefits start at 70 this Aug, SSA agent called w/ retroactive offer going back year (started online app Jan so retro 6 months to July 2019, thou submitted app this May). I never heard such thing. Offer is lump sum 9 months retro 18K (wow). Catch is benefit, for life, as filed 7/19, 13 months earlier. Was pressured on call to decide then. I said had do math. Told had decide very soon. Agent called back less 24 hours later asking, "you decide yet?". Few things told by agent untrue: w/ lump sum 100 years to have $131 less benefit make difference; have only 2 options start this Aug or July 2019; not worry re taxes as not due until 2021 (I'm still working self employed).
SSA should not be springing this on people! Feels like shell game, with high pressure sales. (They work on commission?!). I called local and national SSA confirmed legit and numbers true....though don't have decide asap.
Working math, temptation of 18K now, minus 85 % taxed hit, and lower benefit for rest life, seems like a wash at best. And if a break even, maybe 9 years (not 100!). Am solo, have savings but not really enough long term...why waited to 70. Was so happy last week filing as made goal....now confused and stressed to give my "final answer".
Do you have advice on this retro "deal"?
Social Security employees aren't paid commissions, although they can be paid cash awards for superior job performance. Unfortunately, a Social Security representative's job performance is judged in no small part on statistics showing how quickly they process claims, so the employee with whom you spoke probably feels pressured to finalize your claim as soon as possible. Explaining your options is just part of an employee's job, but ideally they shouldn't make you feel pressured.
I can't make the decision for you, but I can tell you that you don't have just 2 choices. You could actually select to start your benefits effective with any month from 6 months prior to your month of application (or protective filing date, if applicable) until 4 months after your application. Basically, the earlier you choose start your benefits the more back pay you'd receive, but it would come at the cost of a permanently lower monthly benefit rate. And, that lower rate would apply to the survivor benefit rate that could potentially be paid to your surviving spouse, if applicable.
You may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze your various options so that you can choose the best possible strategy for maximizing your benefits in the long term.