Social Security: Why Are You Recklessly Endangering This 69 Year-Old Widow’s Health?

I sense you, Acting Commissioner Kijakazi, truly care about the people you serve. Kristin, a 69 year-old widow, entirely out of the blue received a bill from SSA demanding she repay $118,272 due to alleged overpayment of reduced excess widow’s benefits — benefits she never requested or received.


Dear Acting Commissioner Kijakazi, surely you are not new to your agency’s practice of sending letters to the elderly demanding they repay huge sums to Social Security with no clear explanation and, in far too many cases, due entirely to mistakes made by your agency. Indeed, your agency’s practice in this regard is so horrific that it should be investigated by the Consumer Financial Protection Bureau’s as the first act of the new Commissioner, Rohit Chopra. Social Security is, after all, the largest or second largest financial asset of most Americans.

Commissioner Kijakazi, I’m asking you to read the attendant letter sent me by Kristin, a 69 year-old New York widow, who, in September, entirely out of the blue, received a bill from Social Security demanding she repay $118,272 in benefits due to alleged overpayment of reduced excess widow’s benefits — benefits she never requested and never received, as her bank statements, which record all Social Security wire receipts, clearly show.

I know a fair amount about Social Security’s rules and regulations. In 2015, I coauthored a New York Times NYT bestselling book (Get What’s Yours) on optimizing lifetime Social Security benefits. And I have produced lifetime Social Security maximizing software (Maximize My Social Security) through my personal financial planning software company, Economic Security Planning, Inc, which I founded in 1993. Kristen is a longtime client of my company.

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A month after Kristen’s husband passed in 2015, she received a larger than expected check and immediately went to the Boulder, Co office, where she was living at the time, and told the staff that she had never filed for widow’s benefits and was deferring collection of her widows benefits until full retirement age in order to maximize their annual and lifetime values. According to Social Security staff, your agency has paperwork (which they, incidentally, say they aren’t authorized to convey) documenting this meeting and Kristen’s insistence that she had not filed for widow’s benefits and was waiting until full retirement age to collect them.

Moreover, the additional payment, if it was indeed an excess widows benefit (it seems too small), stopped immediately after her meeting at the local office in Boulder. When she reached full retirement age, she did what she said she would do and applied for her unreduced widows benefit. She then, appropriately, began receiving the combination of her own reduced retirement benefit plus her excess widows benefit. The two added up to her full window’s benefit.

All was fine until March of 2020 when she began to receive one indecipherable letter after another from your agency specifying small monthly benefit adjustments. As indicated, the Social Security letter demanding $118,272 repayment arrived two months ago with a demand to repay the amount immediately or have her monthly benefit stopped for the next 26 years!

The letter, which I have examined, states, “We paid you too much in benefits because you did not elect to receive reduced widow benefits.” The second part of this sentence is correct. Kristen did not elect to receive reduced widow benefits. The first part is entirely incorrect because she never received reduced widow’s benefits. Your agency can verify this a matter of minutes by looking at your own records or checking Kristen’s bank statements. But rather than do your homework, you have, starting this month, eliminated her monthly benefit. This has triggered a bill from Medicare to pay her Part B premium.

Commissioner Kijakazi, I say in full candor that your agency is lucky not to have killed Kristen on the spot via a stroke. If this were happening to your mother, I dare say you would be besides yourself. But these Social Security system mistakes are happening on a daily basis and are terrorizing millions of retirees who learn of their occurrence. I personally learn of these cases on a routine basis. I’ve written about many of them over the years. I’ve also helped in some cases to resolve the problem. Your senior staff is as concerned with this problem as am I and does its best when it can. But the basic system is a financial terror machine, which needs to be shut down until fixed.

Whether or not Social Security is in the right, which is definitely not the case in Kristin’s situation, delivering news in this manner, via indecipherable and, far too often, partially or fully incorrect letters with amounts that change from week to week and with no one to call to you get a straight answer, represents a cruel form of torture. I do not fault you personally. You are new to the job. But you must end this practice. It is surely not something with which you want to be associated. Nor should the Social Security Administration, which has done so much good for so many people for so long, continue to be tainted by this disgrace.

I believe that the agency is now trying to resolve Kristen’s situation and restore her benefits. But she has been tortured long enough, which is why I’m writing to you publicly. Like most elderly widows, she depends on Social Security for her survival.

I intend to continue writing publicly about Kristen’s case until it is resolved. Your predecessors have left you with a dilapidated computer system, which, unfortunately, engages in truly evil acts with no human supervision. I realize you cannot fix everything overnight, but you can begin. And you can begin by establishing an office dedicated to dealing with these cases and staffed by technical experts who answer the phone in finite time. I’m fully at your disposal if I can help you in this matter in any way. I sense you are, Acting Commissioner Kijakazi, the first Social Security director in a very long time who truly cares about the people they serve.

Please contact me and I can put you in contact with Kristin.

Sincerely yours,

Larry Kotlikoff

Letter from Kristin

When I saw the long-awaited envelope from Social Security in the mailbox of my building, I excitedly scurried into the elevator and ripped the large envelope open while going up. Scanning quickly, I saw that it stated something about an overpayment and also saw that the letter was actually a bill for the astronomical amount of $118,272! I suddenly started experiencing something my clients had often reported happening to them — I discovered myself to be hyperventilating for the first time in my life.

I’m a 69 year old retired psychotherapist. I’m a widow, diagnosed with Bronchiectasis and MAC, a life sapping antibiotic resistant chronic infection that leaves one vulnerable to other killer infections. Bronchiectasis is exacerbated by stress. I am stressed.

This whole story started in March of 2020 when I had received a letter from SSA saying that I would be receiving $424 less than the $2,473 I had been receiving every month, as a correction to my account. They also demanded $4,011 in repayment for what they believed they’d overpaid me, all with no clear explanation. I filed an appeal and a few months later that amount was changed from $424 to $345 less every month, again stating it was a correction. The amount that they believed they overpaid me was changed from $4,011 to $669. This was better, but I still needed the $345 back every month or at the very least, a reasonable explanation.

Over the next year I telephoned the SSA 800 number countless times, hoping for some kind of meaningful response. I heard various contradictory stories from the 800 number staffers offering all kinds of reasons, (including that my husband had received too much!) but no answers as to what computations had led to these conclusions.

I finally called my local office here in NY this summer and the helpful staff there said they would contact an office called the Payment Center. The local office staffer told me, after looking back at my record, that they guessed that SSA had perhaps made a mistake which may possibly have happened the month after my husband died, when SSA automatically started depositing early widow’s benefits into my account. I had been told explicitly to wait until full retirement age for my widow’s benefits since getting them early would cause them to be permanently seriously reduced. When I discovered the deposit, I walked into the local Social Security office in Colorado, where I was living, and told them that I did not want early widow’s benefits and would apply for them at the appropriated age. They then stopped those payments for several years until I reached FRA and applied for my unreduced widows benefit.

After the call to my local office here in NY, I heard nothing for a couple of months until receiving the calamitous bill from SSA on Sept 1. I had so hoped that the letter would contain the good news that they had discovered their mistake and the thousands of dollars that they owed me would be deposited into my bank account and original payments restored. Instead I received a bill for $118,272 — more than 100% of all the benefits SSA had ever paid me. Apparently they think I qualify for nothing at all. That’s when I started taking the anti-anxiety medication.

And at this point I contacted Larry.

On Oct 1 they wrote to say that all my benefits would be suspended until 2037, when I am 85 years old if I live so long, which at this point doesn’t look so good. This month I received a direct bill from Medicare because I’m no longer receiving any benefits at all from Social Security and, like everyone, they need to be paid, right?

And I’m still waiting.

Kristin


Laurence Kotlikoff is a professor of economics at Boston University, author of Money Magic (forthcoming), and president of MaxiFi.com. He writes regularly for Forbes. His Ask Larry column answers your questions about Social Security.

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