Why Social Security Decisions Are So Tough

If you’re facing the decision of when to file for your Social Security benefit, you’ve probably noticed just how confusing it can all be. There are so many decision-points in the system, it’s no wonder folks are confused.  Depending on your point of view and how you count the decision-points, each person facing this decision has thousands of possible combinations to consider as they decide when to pull the trigger and file for benefits.

Recently I was going over a decision tree that I had built to describe the decision-making process for filing, and within this review I have counted that for a single, there are 14 decision-points and a total of 96 months in which a filing decision can be made, for a total of 1,344 combinations. 

If the single person chooses the option to file and suspend benefits to protect a filing date, this adds an additional 36 to 48 months of decision-points.

Add a spouse to the mix, and the decision-points increase to 21 for each spouse, with up to 96 months of filing options, for a total of more than 4,000 decision-points for a couple.

If you’ve been married previously and are now single (due to divorce or death of your spouse or ex-spouse), add more complexity. Exponentially more complexity ensues if you were married at least 10 years to more than one ex-spouse.

When you consider that a decision made in haste could mean a difference of up to $100,000 or more over your lifetime, as well as how many possible decision-points there are, it doesn’t surprise me at all that I’ve been hearing from a lot of folks lately.