Widows and Widowers Beware

We have been writing these columns for 7 years and have written several articles about widows and widowers and the importance of knowing which benefit to take and when.  Well, now our warnings have been unveiled.  In an internal audit report released last week by the Office of the Inspector General of the Social Security Administration it was reported that more than 15,000 widows and widowers, who are currently collecting retirement benefits on their own earnings record are actually entitled to receive larger benefits.

Auditors identified 30,768 individuals receiving retirement benefits as of January 2019 who might be eligible for additional benefits.  They then chose 100 cases and did reviews; 50% of these cases that were reviewed were drawing less than they were entitled to, so ½ of 30,768 gave us the 15,000 number. The report stated that “we estimate 15,076 retirement beneficiaries were eligible for $193.8 million in widow(er)s benefits as of September 2019”.  Furthermore, it estimated that 12,615 of these beneficiaries could lose an additional $530.9 million in benefits over their lifetime.

The OIG report recommended that the Social Security Administration evaluate improvements needed for its quality reviews, clarify instructions to SSA employees and develop additional processes to identify retirement beneficiaries who are potentially eligible for widow or widower benefits.  SSA agreed with all of these recommendations.

People in general do not realize that there is a separate and distinct set of rules and regulations for the widow and widower.  They have other options available that can be confusing at best and not choosing wisely could result in severe underpayment of benefits.

Some of the confusion comes because beneficiaries are usually entitled to one of two benefits – theirs and the Survivors.  This puts them in a category called “dually entitled beneficiaries”.  If you are qualified (another set of rules) you can draw the Survivor Benefit at an earlier age (60 or 50 if disabled) than your own benefit.  Again, this may not be your best option.  If you are working, it will complicate matters because of the Earnings Limitations rule.  The Survivor Benefit is available but reduced quite substantially for taking early, and if you draw this benefit at age 60, it will be reduced by 28.5%. 

So, again if qualified, should you draw your benefit early and eliminate your Delayed Retirement Credits, or draw the Survivor Benefit?  It depends on so many different variables; your age, your income, your needs, your benefit amount, if you are continuing to work to name just a few.

A professional review is necessary to determine all your available options – don’t become one of these statistics.

Pillars LLC is in the Corinth, MS area but service all 50 states.  Roy and Diane are both National Social Security Advisors and Roy is a former CPA of over 40 years.  You may contact them at dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699.  KNOW before you GO!!

Posted on by hgasaway

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