Minimum Widow Benefits

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Widow benefits are indeed complex and have options available that other benefits do not. With that being said, we will try and explain some of these additional options. First of all, widow/widower benefits (Survivor benefits) are available at age 60 or 50 if disabled; other benefits start at age 62. If you start drawing these benefits at an earlier age, there will be costs attached to your decision.

Available to you are the Survivor benefit and your benefit and it is paramount that you know which benefit to take first. Also, if still working, you will be hit with the Earnings Limitations rules that lives with you until your Full Retirement Age. This rule limits your income to $17,040 (2017) without being subject to a penalty, that could, in turn, potentially eliminate any Social Security benefit. And if you have filed, you have locked in your amount regardless of the income.

If you take the Survivor Benefit at age 60, it will immediately be reduced by 27.5% – at Full Retirement Age you will be eligible for 100%. Now, this rule has an exception if your spouse started drawing his/her benefit prior to Full Retirement Age. Although the Survivor Benefit would normally be limited to the amount your spouse claimed before death, this exception (Minimum Widow’s Benefit) would allow you to draw the larger of what the deceased worker was collecting or 82.5% of the Full Retirement Age amount. This could be a big difference in your monthly income. This benefit is computed using the WINDEX computation at the Social Security office.

Widows who are eligible for both a widow benefit and a retired-worker benefit can claim one benefit initially and then claim a higher one at a later date. For example, a widow can claim a widow benefit at age 60 and wait to claim a retired-worker benefit (with DRCs) at age 70. In this case, the widow would be a widow beneficiary initially and then only a retired-worker beneficiary. As another example, a widow might claim only a retired-worker benefit at age 62 and then claim an unreduced widow benefit at the FRA of 66. The widow, in this case, would initially be only a retired-worker beneficiary, but then would become a dually entitled widow beneficiary.

A Survivor Benefit does not qualify for Delayed Retirement Credits but your own benefit does if drawn after Full Retirement Age. So, here is where the decision making takes place – take my benefit or Survivor Benefit? Work or not work? Just work and not file yet…….you need to know ALL the rules before making an intelligent filing decision.

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, on their website at or call at 601-954-0699.

Currently Insured Status

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There is a special rule for those who do not meet the requirements for “Fully Insured Status” and it is called “Currently Insured Status”. It can be considered a backup that gives only partial protection for your family.

If you are “currently insured”, there are only two types of survivors that can be paid your qualifying benefits – your children, and your spouse who is caring for your children.

To qualify for this status, your spouse must be caregiver for a child under 16 years of age, and the recipient of Social Security payments. No payments are possible to your parents or your surviving spouse not caring for children. You are considered “currently insured” if when you die, you have accumulated 6 work credits in the previous 13 calendar quarters. This breaks down to working at least 1.5 years in your final three years of life. This rule only applies when surviving children are involved.

EXAMPLE: John dies at age 30 with only 8 work credits. He is not fully insured because he needed 10 work credits for fully insured status. However, 6 of his work credits were in his last 3 years; therefore, he is deemed currently insured status. His children will get Social Security benefits from his work record until they meet the deadline for benefits (based on age or school graduation) and his wife Susan will get Social Security while she is caring for the children, until the youngest turns age 16.

When Susan reaches retirement age, she will not be eligible for widow benefits on John’s record because his “currently insured status” does not provide for that type of benefit. The payments to his family will also be low because of his limited work history.

“Fully Insured Status” is by far the most comprehensive coverage for your family. This means you have earned enough work credits to provide Social Security payments to your survivors in all categories – spouses over 60, younger spouses caring for your children, your children and your dependent parents. Once you earn 40 credits, you are permanently insured for all your family members. There is a sliding scale with the requirements to become “fully insured” based on your age of death.

EXAMPLE: Greg was 28 when he died so he only needed 6 credits for fully insured status for survivor benefits, not the full 40 credits required for retirees. Greg had accumulated a total of 30 works credits, so his wife and children will be eligible for Social Security benefits.

Rules, rules and more rules. Education and knowledge are necessary to make a desirable Social Security filing.

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, on their website at or call at 601-954-0699.

Situational Social Security

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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. Don’t shortchange yourself – it happens every day!!

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, on their website at or call at 601-954-0699. KNOW before you GO!!

Mama Stayed at Home to Raise the Kids

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You would be surprised the number of couples we see where the Mom did not work, or barely worked, and does not know if there are any options available regarding Social Security. If married and your husband qualifies for benefits, yes you do. Many rules and regulations to wade through but don’t lose heart!
I qualify for benefits but have 7 zero’s in my Earning History where I stayed at home with the kids – this adversely affects my benefit amount. These 7 zero’s are included in my top 35 years of Earnings History and are calculated, with factoring, to determine my benefit. So, just maybe, I need to look at filing a different way.
Upon reaching age 62, even if you have no work history of your own, you can begin receiving a benefit as the spouse of someone who is entitled to a retirement or disability benefit; the requirements are that you have been married to your spouse for at least one year, that your spouse has filed for his/her own benefit (exceptions for ex-spouses), and you cannot claim spousal benefits if you have filed for your own retirement benefit and your benefit amount is greater than one-half of your spouse’s primary insurance amount. If you wait until Full Retirement Age to file for this benefit, it will be 50% of your spouse’s primary insurance amount. Filing for this benefit early, could result in a reduction as high as 30%.
Unlike Social Security retirement benefits, the spousal benefit does not increase if you wait to take benefits beyond your full retirement age, currently age 66 for most retirees. Thus, there is no advantage in waiting beyond your full retirement age to start taking your spousal benefit.

Also, if your spouse has suspended their benefits, you will not be entitled to a spousal benefit until they start drawing again.

These benefits are called auxiliary benefits and were created to acknowledge the support you provided for your family during your working years – such as homemaking assistance, child rearing, transportation and all the other things necessary for a family to function properly. This is one of the strengths of the Social Security system – providing for family benefits.

Caution – if you are entitled to two different benefits such as spousal, ex-spouse, widower, or your own, please make sure you know which benefit to file for first – we refer to these people at DUALIES – dually entitled and you could possibly be making a huge mistake if you don’t know which direction to take.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

Social Security Inspector General’s Audit

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On Valentine’s Day, the audit report from the Social Security Inspector General’s office was released – this audit was regarding internal controls about informing widows and widowers concerning their benefit options. The report found that 82% of current beneficiaries who are entitled to two benefits, were not informed of their options that would have resulted in higher benefit.

Is this alarming – YES!! Unexpected – NO!! In article after article we advise people to know their options – you have to know what you are entitled to before you go to file.

A random sample of 50 beneficiaries were used in their audit – these were the results:

  1. 41 were eligible for a higher monthly benefit had they delayed their benefit until age 70 – (not delaying the Survivor benefit, just their benefit)
  2. 34 of the 41 represented were over 70 years of age and older and SSA underpaid them a total of $485,911.
  3. Based on this random sample the report estimates that 11, 123 dually eligible surviving spouses would have been entitled to a higher benefit.
  4. The audit report estimates that SSA underpaid about $131.8 million to 9,224 beneficiaries who were 70 and older.
  5. It is being recommended that the agency take appropriate action for the 41 beneficiaries who were identified and determine whether it should review the remaining population who may have been underpaid.

The Social Security Administration agreed with all the report’s findings – which is a good thing. This population, for the most part, needs all the benefits they have earned and deserve. This wrong needs to be corrected.

This is one of the area’s we have seen the most errors since starting Pillars. In fact, we have our literature in many of the funeral homes across Mississippi. About three years ago we did an in-house seminar for Funeral Director’s in central Mississippi, just so they would know the RULES.

Please, please, don’t let your loved ones make this mistake – the comment “one of the first things you need to do if file for your Survivor Benefit” is not good advice! The first thing you need to do is have a professional review your individual situation and make a prudent recommendation based on all the Rules and Regulations. Then when your loved one does decide to file, they have researched all options and the above mistake will not be their mistake. They need to be prepared to go to the SS office and tell them what they are filing for.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

Is A Social Security Review Necessary?

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Had a phone call last week from a client that was excited about retiring, and excited about the options we presented to him about his Social Security benefits. Over the years, he has been a great referral resource for our business. He called to tell me about two gentleman he talked to that were nearing retirement and he shared with them about having a Social Security analysis done prior to filing for their benefits. To make a long story short, they were both astonished that he would file for a benefit off his wife – they were on the short end of the stick regarding the rules and regulations that allow this option.

They were both in Tier 2, which is what we call the URGENT AGE we are currently targeting. These folks, under the new Bi-Partisan Budget Act of 2015, qualify for additional benefits; they turned age 62 by January 1, 2016 and therefore can file a Restricted Application. This Restricted Application will greatly enhance their income stream for LIFE. They did not understand that filing for this benefit will not affect their wives benefits at all, and will allow their benefit to grow at an additional 8% per year between FRA (full retirement age) and 70, or whenever they decide to take their own benefit. So, these two gentlemen are leaving money on the table, simply due to lack of knowledge.

Why then is a review necessary?

  1. To allow the rules and regulations to work in your favor. If you aren’t familiar with the over 2,700 rules, you could be short-changing your family’s future.
  2. To maximize your lifetime benefit amount and monthly income stream.
  3. To make sure that the person that should file first, is the optimal partner.
  4. To allow you the option to tell the Social Security office what you are filing for, not just what is available on your SS statement. You have three options on your SS statement – there are literally hundreds of options when filing if you know how to navigate the system. Most people get so frustrated and confused by the information available on the internet, they just give up and file. Such a shame!
  5. Your benefits need to be reviewed collectively, not individually; this involves not only married couples, but divorced and widowed.

This choice is up to you. But if you want to make a PLAN that will maximize all options available to you and your family, a review is absolutely necessary. Social Security is an area of expertise, just like tax law and Medicare – a professional review will give you the EDGE you have earned and deserve.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

Social Security is Part of the Puzzle

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We have been writing these articles for over 5 years and have never had the response like we had to the recent article “Is a Review Necessary?” My phone literally tore up the airwaves from Jackson, MS north with readers and intelligent questions. Thank you. People are starting to get the point that Social Security is an area of expertise, that has many options, and that needs a review by a Social Security professional before filing; it only benefits you!

Sometimes people view Social Security as that other source of income and do not include it in their overall package preparing for retirement. This is a big mistake. In order to cross that finish line with a PLAN for retirement, you must consider Social Security, 401K’s, other assets, insurance needs, tax consequences and Medicare issues. This is your PUZZLE. And we consider Social Security the corner foundation of that PUZZLE.

Most of you have put together a puzzle; in a puzzle, the solver is expected to put pieces together in a logical way, in order to arrive at the correct solution of the puzzle. All of these areas that need review prior to retirement need a logical order – they have deadlines, consequences, and need some flexibility for maximum benefit. With Medicare, you and your spouse might need different plans offered by different companies. With 401k’s, pension plans and other assets, you need a logical order of withdrawal. And with Social Security, you need to look at your benefits reviewed collectively with your spouse’s benefit, your ex-spouse’s benefit or your deceased spouse’s benefit for maximum benefit and income stream.

With Medicare you can change your plan each year; with Social Security your decision is basically permanent. You can request a D0-Over, but that requires repayment of funds. You can suspend, but that would also suspend any benefits being paid off your benefit (such as to children and/or spouse) – all of the above can be very costly if not done right the first time.

Sometimes when it comes to understanding Social Security, Medicare and taxes, most people prefer sitting down with a human being, or developing a relationship over the phone, to review their situation. Our situations are just too nuanced and vary too much making a one-size-fits all approach unworkable. Remember, each and every situation is different – especially with Social Security there are so many rules and regulations, each situation needs to individualized and customized. Being placed on hold when making a “rest of life decision” is not a best-case scenario.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

35 Years and Counting

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Social Security benefits are a primary source of income for many Americans. For a quarter of married couples and almost half of unmarried persons, this benefit provides more than 90% of income during retirement.

Therefore, it is important to understand how the program works. In particular, you should at least understand how your benefits are calculated, and why the number “35” is important.

These benefits are earned benefits, which means you don’t get them unless you have qualified. You need to earn at least 40 work credits to become eligible for Social Security, and as of 2018, you earn one credit for each $1,320 in earnings up to a maximum of four credits per year. While earning work credits is a prerequisite to qualifying for benefits on your own, working 35 years isn’t enough to maximize your benefits. In fact, if you work less than 35 years, your benefits will be much lower had you worked more. There are some exceptions to this rule that will be explained later.

The Social Security Administration uses an AIME (averaged indexed monthly earnings) to calculate your benefit amount. This takes your top 35 years of earnings, adjusts for wage growth, and applies an index divided by 420 to determine your basic benefit amount. This is the amount you will receive at your Full Retirement Age. So, if you did not work the entire 35 years, there will be some years of $0 earnings factored into your calculation. This will have a substantial impact on your benefit.

While working less than 35 years can have a big impact on the benefits you receive from Social Security, it is not always feasible to continue working for this long. If you are at least 62 years old and your spouse is receiving Social Security retirement benefits or disability benefits, you could be eligible for benefits on your spouse’s work record – this could be 32.5% – 50% depending on when you decide to file. What needs to be emphasized is that you may have many options and you need to know which option is best for you and which option will bring you the most benefit.

If you are divorced, at least two years, after a marriage of at least 10 years and have not remarried, you may qualify for these spousal benefits based on your ex’s work record. Again, you may have several options, and need to make sure you are filing for the right benefit at the right time – once you have filed, it is basically a done deal.

If you want to maximize your Social Security benefits, making sure you get 35 years of work is essential. Working longer can also make it possible to delay claiming your benefit, which can make a big difference in your income stream, and your Survivor benefit amount.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

Does It Matter Who Dies First?

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None of us have a crystal ball, so if married or previously married, we have no idea who will be the remaining spouse. To be honest, we probably wouldn’t want to know. But, we can all make reasonable assumptions about our life expectancy. We can use an online calculator, we can look at our parent’s situation, or simply rely on our gut feeling; but in order to make a BEST decision about Social Security benefits you need to put a stake in the ground about the age at which you think we will die.

I don’t like writing about this issue, but it is at the core of helping our clients make a plan to maximize their benefits during their lifetime and for the survivor when one dies. Why you may ask? Well, that is not an easy question to answer because Congress through the Bi-Partisan Budget Act of 2015 put people in categories based on ages. Sometimes couples have one spouse in one category and the other spouse in another – they live by different rules and regulations regarding their benefits. Benefits can be close to the same amount, or as far as the east is to the west in $$$ amount – this brings on another set of circumstances that need to be reviewed. A valid point is that nobody’s Social Security situation is the same – taking advice from friends about what they did is of no value to you – their situation is not the same as yours and will probably cost you dearly. Each situation is unique – no playbook here.

The reason we need to know who will live longer is to try and capitalize on that benefit amount for a greater Survivor Benefit for the couple. Let’s use an example of John and Susan;

They are both age 62, so past the age of utilizing claiming strategies (if you turned age 62 by January 1, 2016 you can use a Restricted Application or might be eligible for a Spousal Boost to improve your situation).

John is the higher earner and his Full Retirement Age (FRA) benefit is $2000 per month. Susan’s benefit at FRA is $1200 per month. John thinks her will live to 75 based on family history and current health issues, but Susan believes she will live to a ripe old age of 95, based on family history and good health so far.

If they both decide to take their benefit at age 66, they will draw a combined benefit amount of $3200 per month, less Medicare premiums and taxes if they choose to take from their benefit amount, until John dies at age 75. Now the only check Susan will receive will be the $2000 per month that John was drawing.

But, if John had waited to draw at age 70, Susan would receive $2640 per month for the rest of her life. If she lives until 95 as estimated, her lifetime benefit would have grown to $153,600 more than the previous scenario.

The best Social Security strategy for your cumulative lifetime benefits with income protection should you live longer than you expect – or live long enough to exhaust your savings. This is known as “longevity risk”. Judiciously choosing when to begin your benefits can add years to the longevity of your savings. Getting more from your Social Security benefits means that you will have to withdraw less from your savings over the retirement years.

Yes, readers it is a balancing act – one that should not be taken lightly.

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, on their website at or call at 601-954-0699. KNOW before you GO!!

The Shifting Retirement Age

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In 1935, the original retirement age for Full Benefits was set at age 65. Why age 65? First, life expectancy in 1935 was at or about age 61, therefore the odds of collecting Social Security was slim to none. Secondly, Germany had the first Social Security system and that was the age they had chosen – so maybe the United States just wasn’t original. Thirdly, the Social Security Historian’s office stated that since railroad pensions and other state systems’ used age 65, it was a practical actuarial choice.

Whatever the reason, 65 remained the Full Retirement Age until 1983 when there were amendments to the Social Security Act. The explanations for the change were that people were living longer and that by raising the full retirement age saved the SSA money, putting the program on a sounder financial footing.

Then, in 1956, age 62 was introduced as the EARLY retirement age for women and the same was extended to men in 1961. This is retained in the present law; however, benefits are cut for taking early.

We still see people filing at age 62 each day – because they are eligible they take the benefit. By doing this, they usually do not realize the consequences – reducing their benefit from 25-30%, eliminating claiming strategies that improve their income stream, reducing the Survivor Benefit, having to deal with Earnings Limitations if still working to name just a few. These are serious consequences that can in most cases be eliminated with just a little planning and flexibility.

The Social Security office is there to take your order based on your benefit amount. Their job is not to look at your benefits and give you advice about the best way to file. With very few exceptions, people do not realize that the Social Security office does not know if you are married, single, divorced, if your ex-spouse was drawing disability, if you have two children under the age of 18, if you also worked for the railroad and have a different set of rules to follow, if you had another job that did not require you to pay SS taxes, if you are entitled to a Spousal Boost or claiming strategy, and the list goes on. You need to have all these questions answered and your options calculated before going to file.

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, on their website at or call at 601-954-0699. KNOW before you GO!!