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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 dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!

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 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 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 dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!

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 dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!

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 dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!