It’s always fascinating to me how people can look at the same situation and see things totally differently. For example, I look in the mirror and see Brad Pitt’s slightly older brother starting back at me. But my wife looks at me and sees a grizzled old Gabby Hayes look-alike!
But I digress. We’ve all heard of the proverbial “Is the glass half-full or half-empty?” question. That’s kind of what I’m talking about. Some people see the positive side of things. And some see only negatives. And given the nature of this column, I’m thinking about how this relates to Social Security-related scenarios. Coincidentally, my email inbox this week contains several examples of this.
Q: I just turned 70 and finally started my Social Security checks. My first check had a Medicare premium deducted from it. But I have been billed for Medicare every three months since I turned 65. And I’ve already paid the premium they took out of my check. This is just another example of why the government can’t do anything right! Will I ever get this money back? Or am I just another victim of government ineptitude?
But then, the same week, I got this email.
Q: I signed up for Medicare, but not Social Security, when I was 65. I have been paying my Part B premiums quarterly ever since. I recently turned 68 and started my Social Security checks. They took my Part B premium out of my check. But the problem is that I already paid that premium through the quarterly billing process. I assume they will eventually catch this error and pay me back, right?
A: Yes, you are right. This is a very common occurrence for folks who start their Medicare first and then, a few years later, sign up for Social Security. This is a simplistic explanation, but it basically works like this. The people who send you the quarterly billing statements for your Part B premiums are a different group than the people who arrange for the premiums to be deducted from your Social Security check. But every month, they exchange their records. Once that exchange happens, and they notice that you’ve paid Medicare premiums for the same month(s), they will reimburse you.
And here is another kind of Social Security scenario where two people see essentially the same situation very differently.
Q: I am 67 and about to file for my Social Security. I went online and checked my Social Security earnings record. I was shocked to discover that record is missing two years of earnings from the early 1980s. I immediately went to my Social Security office and they told me that it is too late to make any corrections. So does that mean because some bureaucrat was asleep on the job 40 years ago, my Social Security check is going to be shorted because of these missing earnings?
Government bureaucracy! Don’t you just love it?!
And then there was this email.
Q: I am 60 and starting to make some plans for my Social Security. As part of that process, I checked my records online. Everything seemed fine. But I did notice that there was a gap in my earnings from 1979 until 1981. This was obviously very early in my life. I think at the time I was working for some fast-food restaurants and not making that much money. Can I assume that this will have little if any affect on my eventual Social Security retirement benefit?
A: Yes, you can assume that. And so should the guy who sent that first email. And now let me explain how all this works.
First, I don’t want my readers to think that Social Security earnings records are full of gaps and errors. Actually, just the opposite is true. I remember seeing statistics that say there is a 98 percent chance that your earnings records are correct and up to date. Still, when you talking about records for virtually every working person in this country, even a 2 percent error rate means more than a few records have glitches.
That’s why people are encouraged to check the earnings statement that Social Security occasionally mails you, or to go online to the Social Security website and check them yourself. As a general rule, the law says you have three years to make corrections to your earnings record. But that law also says that the records can be corrected at any time if the correction will make a difference in the amount of someone’s Social Security benefit.
So now let’s apply these rules to the scenarios presented by the two emailers. Because a Social Security retirement benefit is figured using a 35-year base of inflation-adjusted earnings, in both cases it is highly unlikely that the missing earnings from so long ago will be part of that 35-year base of earnings. So the second guy was right. It’s no big deal and nothing to worry about. And the first guy should know that if for some fluky reason, his missing earnings from almost 40 years ago become relevant to his Social Security benefit, he can work with his local Social Security office to try to correct the records.