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!!

Social Security Benefits are an Asset

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Day in and day out, we see middle income married couples with an aggregate cumulative Social Security benefit, through life expectancy (85 for men and 88 for women), well over a million dollars as a combined asset. When we show this analysis to our clients, they are in awe as they never knew their benefit to be worth so much. Taking this into consideration, why aren’t people finding out ways to maximize what is their most valuable retirement tool?

Money in general, and more specifically Social Security benefits, tend to evoke very emotional reactions. People want to draw as soon as possible because they don’t want to be subsidizing someone else’s retirement without seeing the benefit for themselves. This fear of missing out often leads to an erroneous investment mindset about Social Security. Retirees with this mindset truly believe that maximization comes from drawing early instead of reviewing what options are available. As we share in our seminars “people are more concerned about dying early, than living too long”. By drawing early, you would have to die before reaching your break-even point to win financially. This does not seem like a good way to maximize an investment.

People also have very good intentions, that usually go by the wayside – they will say “I will go ahead and draw early and invest that money”. This kind of thinking ignores the reality of investments, specifically risk and the volatility of investments; also the fact that LIFE happens and that money does not always end up where you had intended it to go. Because of inflation, money loses value over time. Putting your Social Security checks in conservative investments such as CD’s, Treasury Bills and savings accounts is one of the riskiest things to do – yes, your principal is protected, but the buying power of your money will be eaten away by inflation.

So, let’s look at your Social Security benefit – there is no volatility, it includes Cost of Living Adjustments to ensure the buying power of your benefit, it has the right of survivorship, and for every year you wait to draw your benefit after full retirement age, you will be rewarded with an 8% increase per year. Treating your Social security in the terms of protection versus profit, is a much better way to look at this asset.

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!!

Wife is Older – Strategies

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Because there are more re-marriages in our society today, we see more clients where the wife is quite a bit older than the husband. This creates an unusual set of circumstances when filing for your Social Security. Why? Because if the wife is younger, the usual situation created is that the wife, if the lower earner, would entertain spousal benefits and then if possible switch to her benefit later in the filing strategy. Not the case when the husband is younger – let’s look at a real-life situation.

  1. Amy will turn Full Retirement Age in February 2019, and Randy will turn Full Retirement Age in October 2023. Amy has the lower benefit amount and Randy intends to continue working past his Full Retirement Age.
  2. Amy’s Full Retirement Age Benefit is $550 and Randy’s is $2140.
  3. If they both filed early their lifetime maximum benefit, based on life expectancy of 85 for him and 88 for her would be $716,740.00. Amy could file at 64.9 months and Randy would file at age 62. With this option, they both would also be restricted on their income due to the Earnings Limitations which is $17,040 in 2018. Their Survivor Benefit amount would be $1,762.00.
  4. If they both filed at Full Retirement Age (66 for her and 66.6 for him) their lifetime maximum would be $955,200.00. They could both continue working without concern for the Earnings Limitations rule. Their Survivor Benefit would be $2,137.00 per month.
  5. If they both waited and filed at age 70, the lifetime maximum benefit would be $975,630.00 and their Survivor Benefit amount would be $2,735.00.

Options over and above what they are told (above) on SS statement:

  1. BEST CASE – Amy files on her benefit at age 66. Randy files for his benefit at age 70. Amy adds spousal benefit at age 74.2 which increases her benefit from $550 to $1068 per month. Total benefits through life expectancy are $993,202.00. NOTE: this is an increase of $17,500 over waiting until age 70. This is money that would have never been noticed, had they not gotten professional advice. Survivor benefit is maximum at $2,735.00.
  2. ALTERNATIVE 1 – Randy files for his benefit at age 68 and Amy files for benefit at age 66, then Amy files for spousal benefits at age 72.2. Total benefits would be $977,250.00 and Survivor Benefit would be $2,390.00

These are just two additional options available – we could add many, many more based on the individual requests such as when they want to retire, how long they want to work, and their desired income stream. The increase from filing early to BEST CASE is $276,462.00 through life expectancy. The point is – you have more than the three options available on your Social Security statement. With the addition of Spousal Benefits, at the appropriate time, the lifetime maximum is increased. And in other circumstances, a Spousal Boost is available. Different rules for different situations – contact a professional before 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. KNOW before you GO!!

When Should I File?

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First, people need to know when their Full Retirement Age is – most people do not know the answer to this question. The answer can be found on your SS statement. You need to set up an account at to obtain your latest SS statement and there will be a benefit amount listed at your Full Retirement Age. You need to set up this account and check each year against your W-2; many mistakes are found in your Earnings History listing and this is what is used to calculate your benefit amount.


65 if you were born before 1937

65+ months if you were born between 1938 and 1942

66 if you were born between 1943 and 1954

66+ months if you were born between 1955 and 1959

67 if you were born after 1960

When can you start filing? The earliest you can file is age 62 and any month between 62-70 is acceptable. Some of the complications with filing before your Full Retirement Age are: benefits are immediately reduced by 25-30% depending on your year of birth, you immediately reduce the Survivor Benefit, you immediately eliminate any claiming strategies that exist to improve your situation over and above the three options listed on your statement, and if still working you will be hit with the Earnings Limitations rule which is $17,040 for 2018 (if you earn over this amount, SS will reduce your benefit $1 for every $2 over that maximum). A lot to consider, but most people only consider the fact that they are eligible and therefore start drawing. You also need to consider what works best for you and your family – are there health issues, do you want to continue working, are you mentally ready for retirement, can you absorb the medical insurance issue between 62-65, and what level of income do you need or want to maintain? These are just a few of the considerations that need to be thoroughly reviewed prior to a BEST decision.

For many people, waiting until age 70 is not the best choice either. I read 5 articles today that clearly listed filing at age 70 as your best option; all we can do is shake our heads. These articles are written by financial professionals and they are not aware of some of the rule changes. Waiting and filing at age 70, has eliminated claiming strategies you may qualify for to provide an income stream between age 66-70. Claiming strategies are not just for married couples, but can include those widowed and divorced people as well, if they qualify under the new rules. In summary, you simply left money on that table that you qualified for by not knowing the rules and regulations. Also, people still believe that they file for Social Security at full retirement age of 65, the same as Medicare – this has changed and this error will cost you money in the long run.

If we had $10 for every person we have talked to, that wished they had contacted a professional prior to filing, we would not be writing these articles!!

The purpose of this article is to try and make people aware of the fact that Social Security is an area of expertise just like Financial Planning, Tax Law, Medicare and other professions. If you don’t concentrate and study it each day, missing just one rule or regulation can cause your client to miss out on income he/she has earned. Ron Carson, CEO of Carson Wealth Management Group, recently stated that retirees are leaving an estimated $10 billion in Social Security benefits unclaimed each year because they have not optimized their claiming strategies. We truly understand that waiting is not possible for everyone, but our goal is to allow people to see their options and make a prudent decision from their reports we provide. Do yourself a favor – it is well worth it!!

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!!

Changes to Social Security for 2018

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Thought we would take an article to share with our readers some of the changes that will affect Social Security in 2018.

COLA (Cost of Living Adjustment) – the 61 million Social Security beneficiaries will receive a 2 percent cost of living adjustment to their benefit amount. This will make the average monthly payment go up from $1,377 per month to $1,404 per month. Be aware that this COLA adjustment may not be seen in your payments because of the increases for some in the Medicare premiums. “About 70 percent of Social Security beneficiaries on Medicare will only see an increase of $2 in their monthly checks,” says Dan Adcock a policy expert at the National Committee to Preserve Social Security and Medicare (NCPSSM).

SHIFTING FULL RETIREMENT AGE – the full retirement age (FRA) will inch up again this year to 66 and 4 months for those born in 1956. This pattern will continue until it reaches age 67. By waiting until FRA, beneficiaries will ensure that they will get the full payout. Delaying beyond that has additional advantages including an increase of 8% annually to your check amount, improved Survivor benefit, utilization of claiming strategies to improve your income stream and others.

EARNINGS CAP – the amount of income subject to tax for the Social Security program will increase in 2018 to $128,400. Earnings beyond that are not subject to Social Security tax. This will result in an estimated 12 million people paying higher Social Security taxes.

HIGHER BENEFIT INCREASE – the maximum benefit will increase by 3.7 percent from $2,687 per month ($32,244 a year) to $2,788 per month ($33,456 a year). This maximum amount is based on your top 35 years of earnings and only a handful of people are eligible for this amount. The average benefit in 2018 is $16,848 for the year.

EARNINGS LIMITATIONS INCREASE – if you decide to draw your benefit prior to your full retirement age, your income per year has limitations. The increase in this amount will be to $17,040 in 2018. For every $2 you earn over this amount, Social Security will withhold $1 from your Social Security check. The year that you turn full retirement age, that limitation increases to $45,360 for that year only. At full retirement age and older, there is no restriction on income amounts.

Do yourself a favor in 2018 – plan ahead and have this benefit reviewed before filing. Your decision about filing is basically a permanent decision. We unfortunately see the sad faces of people that did not educate themselves to the options that are available before 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. KNOW before you GO!!