If a widowed spouse is still working, however, they could see their survivors benefit reduced if they earn more than the income limits set by the SSA. On the other hand, their earnings will accrue credits toward their retirement benefit.

In either scenario, the widowed spouse needs an advisor to walk them through their options and the financial implications of their choice.

Clients are often surprised that there’s no double dipping in Social Security. A widowed person is not entitled to the deceased spouse’s and their benefits. And that’s why a financial advisor wants to hit their Social Security planning software to determine how to maximize the surviving spouse’s benefit.   

By the way, it’s worth reading a helpful blog post published by Social Security, “Four Tips Widows Need to Know.”

Planning Social Security Filing Together Matters In Life And After Death
When to file for Social Security benefits are decisions that spouses should make together and always in consultation with their financial advisor. Why? Because …
• The age at which the deceased spouse started collecting Social Security affects a surviving spouse’s benefit, as the example above shows.

• If both spouses worked and accumulated Social Security credits, each is eligible for benefits. The software can model what each will receive by filing early (at 62), at full retirement age and later, at 70. That’s important, especially when working with an advisor on plans for retirement income.

• Both spouses need to be aware of what happens when one passes away. Decisions can turn on factors that include their ages (is one much older than the other?), their health and their other assets available for retirement income. 

Remember This …
Strangely, Social Security is an area many clients never consult with their financial advisors about, and often to their detriment. My advice to financial advisors is:
1. Ask clients early and often about their plans for Social Security. Many are eager to get the benefits they earned through years of hard work and paycheck deductions. They turn a blind eye to the financial benefits of delaying if they are secure enough to do that. Record cost-of-living adjustments last year may have convinced some that the immediate gratification of filing outweighs any benefit of waiting.   

2. Advise all clients not to make any choices about Social Security without their spouse and without taking a comprehensive view of their financial situation and expectations for retirement. Many people compare what they’ll earn per month at 62 or later—at their FRA or 70—and rationalize that it’s a “small” amount. Over the years, and with longer life spans, however, those differences can add up. 

Alyson Dorosky, CSSCS, is head of Social Security support at LifeYield. She works with advisors and their clients to address their thorniest Social Security issues.

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