Call Us Today: 601-954-0699

Ray started his Social Security benefit at age 62 thinking it was the right decision for his family.  He turns Full Retirement Age in September of 2020.  He started doing some projects from home that have generated additional income over the years, and he doesn’t need his Social Security income to maintain the quality of life he and his wife desire.  Does he have any options?

What does this have to do with anything?  We have always been told that once you filed it was a done deal.  Basically, for most, it is a done deal.  But at Full Retirement Age, you do have the option to Suspend (not withdraw) your Social Security benefit.  It is called Voluntary Suspension and is as easy as a phone call or a written request to the Social Security Administration offices.

Any beneficiary who has reached FRA has the right to suspend retirement benefits after having filed for them and/or having received benefits.  You are opting not to receive your benefits from that point forward, until you reinstate them or reach age seventy.  This suspension would begin the month after you make the request.  In the meantime, your retirement benefits would earn Delayed Retirement Credits worth 8% per year from the time you suspended up to age 70.  You don’t have to wait until 70, you could reinstate at any time.

Sounds like a plan for those that can make ends meet without this additional income.  But you need to consider how this may affect other family members and how you will pay your Medicare premiums.  If you have a spouse, a minor child or a permanently disabled adult child that are receiving benefits from your work record, their benefits will be suspended as well.  And you cannot receive spousal benefits off another record during this suspension.  The only exception to this is a divorced spouse – they will continue to receive benefits on your earnings record even after you suspend benefits.

This is a good way to improve your Survivor Benefits (8% per year) because your Survivor Benefit is worth up to 100% of what a deceased worker was collecting or entitled to collect at the time of death.

If you have filed for benefits within the last 12 months, including those under Full Retirement Age, you can withdraw your application by filing Form 521 and reapply at a future date.  However, you must repay all the benefits that you and your family members have received from this earnings record.  There is a limit of one withdrawal per lifetime.

As with anything dealing with Social Security it become complicated very quickly.  Make sure you need this income source before drawing.  Ray could have earned a lot more money on his projects had he not been limited to the Earnings Limitations rule because he was drawing his benefit prior to Full Retirement Age.  Seek out professional guidance before you make your decision, whether filing early or suspending.  

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!!

According to the Social Security Administration’s Rules and Regulations, individuals who are full retirement age or older when they file for Social Security benefits, have the right to request a lump-sum payment for up to six months of retroactive benefits. This strategy, of course, will slightly reduce your benefit amount through life-expectancy, but is an option.  In order to get the full 6 months, you had to have started your file date 6 months past full retirement age.  If you file three months past Full Retirement Age, you would be entitled to 3 months retroactive and so on.

This was attractive to many folks that have waited to file for their benefits.  It is a quick infusion of cash with a small benefit reduction some people are willing to accept.   To many, worth the wait, and an attractive option.  

Well things have changed.  We are hearing reports that these requests are being denied.  People are having to justify their need for the additional cash requested in their applications.  There should be no such need for additional information – it is their money they have earned and are entitled to request.

If this happens to you, we suggest you contact your local Congressman to have your situation re-evaluated.  

With the closure of the local Social Security field offices in mid -March, things are definitely challenging.  In the absence of in-person appointments, benefit applications are being processed online and over the phone.  We cannot emphasize enough, the need to know what you are entitled to before making that call.  Mistakes can be made, benefit options missed, additional income strategies ignored – it is up to you to educate yourself on options available.

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!!

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!!

Many of the clients that we serve have only one breadwinner.  What does this mean?  It simply means that only one member of the couple has the necessary 40 quarters of earnings history to qualify for a Social Security benefit.  This is especially true for women as many of them were stay-at-home Moms and were never employed outside of the home.  This was their choice and Congress decided they would not be jeopardized because of that choice.  Many of them also may have only had minimum paying job during school or college and never obtained their 40 quarters.  

One of the key strengths of the Social Security system is the provision for spouses of retired or disabled workers.  Under certain circumstances, you, as a dependent family member, are eligible for Social Security payments called auxiliary benefits.  These benefits are additional payments and do not reduce the worker’s benefit amount.  

A spouse may be currently married to the worker, or may be a former spouse, divorced from the worker.  The spouse must have been legally married to the worker for one year or ten years if divorced.  If state law recognizes a legal marriage relationship between individuals, then so does Social Security.  There are included in this definition same-sex marriages and common-law marriages which carry many rules and regulations.

If you are eligible for spousal benefits, you will receive a percentage of the worker’s full payment amount (the Primary Insurance Amount or benefit available to worker at Full Retirement Age).  Your payment will be computed on the full payment, not on what the retired workers actually receives. Your benefit amount will also be determined by when the worker files for his or her benefit. 

If you are at least 66 or at your Full Retirement Age, you will be paid 50% of the worker’s full payment amount.  If you are eligible for a benefit on your own and it is less than 50% of the worker’s benefit amount, you could also be eligible for a spousal boost that would take your benefit to that 50% amount.  If filing for this benefit after Full Retirement Age, you could also be eligible for a retroactive benefit.  Also, if filing at Full Retirement Age and if born before January 2, 1954, you may opt to claim on the spousal payment and delay your own, if you have enough quarters.

Also, if you have a relatively low benefit on your own, and just decide to take it at age 62 because it is available, you could be reducing a potential spousal boost when the worker files for his/her benefit amount. 

Yes, there are many rules and exceptions to the above.  There are different rules for married vs. divorced. We just do not have the space in this article to get overly technical.  But, if you think you might be eligible for this benefit, you need to research your options before filing.  Filing without knowledge of your available options, is always a mistake.  If you don’t know what questions to ask, how can you determine your options?

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!!

The impact of the coronavirus is being felt in all age groups across our nation, and each age group has its own set of complications.  For those nearing retirement age, we are seeing many people that were still working, instead of filing for unemployment benefits deciding to retire and enroll in Medicare.  In many cases this is not the best scenario for your Social Security benefits nor is it the best-case scenario for Medicare if you were a high-income earner. Although Medicare is not our area of expertise, we wanted our readers to become aware of this rule and regulation.

After enrolling in Medicare, your situation will be assessed and based on your former income status.  You or you and your spouse could become members of the higher-income beneficiary category and have to pay an additional $70-$423.40 a month in Medicare premiums.  This is called the IRMAA or Income-related Monthly Adjustment Amount.  Because of your higher income you are required to pay more for Part B medical insurance and Part D prescription drug coverage.

You are thrown into this category because of past income – usually two years back.  If single and your income total was $87,000 or married and income was over $174,000 this will apply.  There are five different tiers of IRMAA, and it is based on a sliding scale.

A loss of your job means a loss of income.  Although your 2020 tax returns may show a significant drop in income from two years ago, that does nothing to help you in your current Medicare situation.

You should fill out Form SSA-44 if you experience any life–changing event that reduces your income. Life–changing events that qualify are marriage, divorce, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income and employer settlement payment.  You can access this form online. Follow the instructions on pages 5-8 especially the date of the life-changing event, evidence (originals) of your life-changing event, evidence of your modified adjusted gross income (this will be an estimate so be as accurate as you can), and document the specifics of your income reduction.

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!!

Social Security is available at age 62 for all those that have earned this benefit.  But, the age at which you claim can make a huge difference in your financial health during those remaining retirement years.

Every situation is different – everyone has a unique earnings history, everyone needs or wants to retire for different reasons, everyone has different assets over and above Social Security to get them through retirement, some people have family eligible for benefits, some people are on disability that rolls over to Social Security, some people had a spouse that died at an early age, some people have been married more than once, and the list goes on.  To rely on advice from your family and neighbors can be a mistake – if they don’t know the rules or the entirety of your situation.  Their advice will be based on their situation, and who knows if they got their situation right?

Here are a few situations that may cause you to think:

Single – no beneficiaries, so what are options for filing?

Divorced and single, married 10 years and divorced 2 years with one or more ex -spouses – can I get a Spousal benefit off of them and what if one of them dies?

Surviving spouses with one of more deceased spouses?

Retired couples with custody of grandchildren?  What about benefits for caregiver as well?

Couples with handicapped adult children?

Couples with a large age difference?

Couples where the wife is the higher earner?

Filing after Full Retirement Age – what about retroactive benefits and when is it wise to take or not?

If I don’t need my Social Security money and have already filed, should I suspend at Full Retirement Age and what are the consequences?

If I don’t have 40 quarters, but my spouse does, do I have any options?

Should I weigh heavily Break-even point or Life Expectancy?

If I have a government pension, will my Social Security be reduced?  How will this affect the widow/widower benefits?

If I am a current widow/widower should I draw the Survivor Benefit or my benefit?  Can I switch from one to the other?

If my pension was reduced because of WEP and spouse dies, will my benefit change?

This is only a partial list of questions that came to mind in 5 minutes…..many more that could be addressed.  The point is folks, Social Security is very complicated.  Study of the rules is a daily event at this address to keep up with the changes.  With the changing climate we are experiencing, and because SS offices have been closed and to contact them on national phone line is a very long wait, is not a reason to panic and go ahead and file.  Remember, this is basically a permanent decision on your part and will affect your family through life expectancy.  Social Security benefits still grow at 8% per year for each year you wait after Full Retirement Age.  Think this through – don’t panic.  Contact professionals that can help you navigate to the best decision for you and your family.

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!!