Tuesday, June 27, 2023

Social Security Insecurity


Laurence Kotlikoff is perhaps the foremost expert on the Social Security system outside the Social Security Administration (SSA) itself (and likely more knowledgeable than most everybody inside that agency) and certainly the best known.  A Boston University professor of economics, he wrote Get What’s Yours—The Secrets to Maxing Out Your Social Security and for years has co-authored the “Ask Larry” column, answering questions submitted by readers about all things having to do with Social Security rules and benefits.

His book, first published in 2015**, is very entertaining but at the same time eye-opening.  Perhaps the most disturbing finding it revealed was that people at SSA gave the public the wrong answer to their questions about 40% of the time.  That is an abysmal record.  And scary.

In a recent article published by NextAvenue.org and reprinted in MarketWatch, Dr. Kotlikoff cited complaints he has been receiving from Social Security recipients about letters sent by the SSA demanding immediate repayment of thousands of dollars in alleged overpayments.  As he wrote in the article, the letters offer no explanation of how/why the overpayments occurred and offer no apologies.  “Hard as nails and as cold as ice” is how Kotlikoff characterized the SSA correspondence.

Judging from the complaints Kotlikoff receives, the demands for repayment can arrive as much as 20 years after the mistake was first made—meaning an accumulated overpayment could amount to tens of thousands of dollars.  But with no real idea of how their benefits were calculated in the first place and no explanation of the mistake, how does one go about appealing these dun letters?  How does one know the letter itself is not a mistake?

Interestingly, no one reports receiving a notice of underpayment of benefits.  To insist that mistakes run solely toward overpayments stretches believability.  Even past reports by the SSA’s Office of the Inspector General acknowledge at least a modest amount of underpayments.  In my own situation, I delayed receiving Social Security benefits and was thus due more than my “full retirement age” benefit (“delayed retirement credits”).  I am still waiting for that extra money.  I understand that I might still have another six to eight months to wait for that, as well as for repayment of an extra month’s Medicare Part B premium that was deducted from my benefits more than a year ago.  SSA is all in on taking back money that may or may not have been overpaid.  They are away from the desk when money is due the beneficiary.

One circumstance seems to pop up frequently in these cases.  Many complainants are subject to the Windfall Elimination Provision, or WEP, which reduces benefits to individuals with non-covered pensions (usually government employees) but who also qualify for Social Security benefits by virtue of another job that was covered by Social Security.

If you have a particularly complex Social Security benefits situation (e.g. subject to WEP, divorcee/multiple marriages, widow/widower benefits especially if minor or disabled adult children are involved, etc.) I suggest you obtain more than one opinion from SSA when applying for your benefits or even consult an independent specialist on Social Security benefits (or “ask Larry”). Open an account on the SSA website and check your history of earnings.  Ensure SSA has your annual earnings correct; it is the single most important factor impacting your level of benefits.  Document everything you do and what you are told and who you talked with.  And if, even after doing all this, you end up getting a letter trying to claw back some money already paid, call your congressman or U.S. senator.  SSA needs to be accountable.

Until next time,


** If you decide to read his book, be sure to read the revised version.  Just a few months after it was first published in 2015, Congress made some big changes to Social Security benefit rules that made a good portion of Kotlikoff’s advice in it outdated.  The latest edition corrects this.


“Here I am sending you out like sheep with wolves all round you; so be as wise as serpents and harmless as doves.”  Matthew 10:16 Phillips

Saturday, June 10, 2023

Dave Ramsey in Court?


For anyone who has read my blog over the years, my dislike and distrust of Dave Ramsey should come as no surprise.  (See “Dave Ramsey’s Fatal Flaw” part one and part two.)  I now have more affirmation of my disdain.

The Washington Post reported last week that seventeen of Mr. Ramsey’s radio and podcast listeners have filed a $150 million lawsuit against him, “alleging that he played a role in defrauding them of millions of dollars when he promoted a timeshare-exit company that did not get them out of their contracts.”

I wrote in recent posts that celebrities like Tom Brady and Steph Curry stand in legal peril for endorsing the cryptocurrency firm, FTX, and its disgraced founder.  I cautioned against following financial advice given by famous people.  Fame doesn’t bestow competency in financial matters.  In fact, there seems to be an inverse relationship. 

But Dave Ramsey?  Financial guru, professed Christian, champion of the little guy, and debt relief savior for millions? 

I do not dispute Ramsey’s good works through the years.  He truly has helped legions of individuals and families claw their way out of debt and given a lot of good advice.  Not all of it good, mind you, but a substantial portion.  But he comes at it with the wrong attitude.

Alright, I admit that “attitude” is intangible and maybe not always a good measure of someone’s trustworthiness.  But that blustering and (in my opinion) un-Christian approach to his advice-giving emits a suspicious odor to my nose and leaves a clue to his motivation: he is moved by money more than his love for helping people.  In this case, greed may have overridden due diligence in his endorsement of Timeshare Exit Team several years ago. 

I’m not endorsing buying a timeshare.  They do tend to be or become bad deals for people who purchase them.  But that presents an opportunity for unscrupulous people to prey on those purchasers by offering to get them out of their deals, break their contracts.  In this case, Reed Hein & Associates, doing business as Timeshare Exit Team, allegedly paid Ramsey as much as $30 million over six years while receiving over $70 million in fees from Ramsey’s listeners who became clients.  Reed Hein & Associates went out of business after settling with Washington state for $2.6 million over alleged deceptive business practices.

This points to an unfortunate business practice of “endorsements” by trusted individuals or firms, even non-profit firms, given with no due diligence.  They fall victim themselves to firms that approach them waving money in the air and promising great results for clients referred to them by the endorser.  In this case, I can imagine Ramsey—who already railed against timeshares—was targeted by Timeshare Exit Team as a perfect (that is, trusted) spokesman for them, promised him a rich commission, and with little or no investigation on Ramsey’s part was endorsed heartily on his show.

It happens all the time, unfortunately.  A friend recently complained to me that she is dropping her United Healthcare Medicare Advantage plan because it was hardly paying anything on her medical bills.  “But AARP endorses them,” she lamented.  “I expected better.”  Well, I am pretty sure AARP is pleased with the commissions they get for endorsing United Healthcare.  And that AAA is happy with their commissions from Hertz, even though there are probably better and cheaper rent-a-car firms out there, even when compared to the “AAA member discount” from Hertz.

I had a front row seat to this dynamic at one of my past jobs.  Companies would make an appointment with our vice president and tout the benefits they could offer our members, and the VP would sign a contract almost on the spot, little or no research done.  I remember he even inked a deal with some outfit called “Players Club” that promised discounts and specials perks at gambling venues like Las Vegas.  What were we doing endorsing a deal like that when we were ostensibly a “healthcare organization”?  Fittingly, none of our members became clients of Players Club and our company never made a cent on that contract.  I happily exited that company a short time later.

The moral of the stories is this: do your own due diligence.  Follow the money, because if there’s someone somewhere making money on an endorsement, then there is a high probability of tainted motive in the arrangement.

Until next time,


“You can tell them by their fruits.” Matthew 7:15, Phillips