So, are You Oblivious to What You Should Clearly Know and Understand?

Robert Terson

I once took a friend of mine, Dave, to a Cubs game; it was about six years ago. At that point we’d been friends for 54 years—went to high school together, were club brothers, stood up for each other when we got married. Dave is 75 now, a longtime successful businessman. I’d describe him as being quite sophisticated, far more knowledgeable about the world he inhabits than the average person, which is why the discussion we had about Social Security shocked me to the point I had to write this blog.

The discussion began when I asked Dave if he’d already filed for Social Security, or, if like me at that point, he was waiting until he was 70. He’d filed at 66-and-a-half, he said, which meant he’d added four extra credits to his full-retirement benefit. When I asked if his wife (she was 68 at the time) had filed, too, he told me that she didn’t qualify for a benefit because she didn’t have the required minimum number of work credits—she’d been a housewife most of their 47 years of marriage (50 now, impressive).

“What about her spousal benefit?” I asked.

He gave me a strange look, said, “What do you mean?”

I narrowed my eyes, said, “You’re kidding me, right?”

The blank expression he was giving me let me know he wasn’t kidding one iota.

Now my jaw was probably hanging down to my knees. Huh? Are you serious? Can this really be possible? “She’s entitled to a spousal benefit, Dave—half of your benefit, less the extra credits.” (A spousal benefit does not include any extra credits.)

His scrunched eyebrows told me he was somewhat dubious. “But she was never really part of the workforce,” he said.

“Doesn’t matter,” I told him; “she’s still entitled to a spousalbenefit, and since she’s past her full-retirement age, that’s half of your benefit, less the extra credits.” I asked him what his benefit was, did some quick calculating, and told him we were talking about approximately $14,000 a year, not exactly chickenfeed.

“Are you sure?”

“Yes I’m sure!” I stated emphatically. As sure as the sun rises in the east and sets in the west; I’d done all the research years ago.

I could see he needed convincing, so I whipped out my iPhone and went to the Social Security site—http://www.ssa.gov/–then clicked on “Retirement,” then “Benefits For Your Spouse”; this is what Dave read after I handed him my phone:

Even if he or she has never worked under Social Security, your spouse

  • can begin collecting the benefits as early as age 62. However, if the benefit begins early, the amount will be permanently reduced by a percentage based on the number of months up to his or her full retirement age.
  • can qualify on your record for Medicare at age 65.
  • can receive a benefit equal to one-half of your full retirement amount if they start receiving benefits at their full retirement age.

Dave was dumbfounded but delighted. Wouldn’t you be if you’d suddenly discovered you were entitled to an additional 14 grand a year? He and his wife filed the following Tuesday (Monday was Labor Day).

Then he told the story to a friend of his, a retired attorney; turns out the friend and his wife didn’t know about the spousal benefit either, and are filing for it, too.

My experience with Dave, to say nothing of the retired attorney, caused me to wonder: How many others are oblivious to this Social Security basic? What other “obvious” things are people oblivious to? Are some salespeople blind to things most of us consider obvious, basic? I’m thinking the answer to that has to be yes.

So consider today’s blog a heads-up alert. Perhaps you need to take an inventory of your assumptions. Who knows, it may be worth even more than $14,000 a year to you.

 

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