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The Social Security Tactic That Could Change Your Life

| March 27, 2018
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The Social Security Tactic That Could Change Your Life

Widowhood Changes Everything
When you go from spouse to widow/widower, your whole life changes. Including your money. With everything you’re working through emotionally, psychologically, socially, and perhaps even physically, you may inherently know you should delay any decisions that can wait until you’ve achieved greater clarity.

Unfortunately, electing how to receive your social security benefits is a decision that waits for no one.

Clear as Mud
Let’s start with the good news: There are surefire ways to maximize your social security benefits.

The bad news: The rules for collecting survivor (widow) benefits are beyond complicated. The amount to which you are entitled depends on factors like your age, your  late spouse’s age, and whether your late spouse had already begun collecting his or her own benefits. And that’s just the beginning.

You need to understand every rule and every choice to avoid missing out on money to which you are entitled.

Making Matters Muddier
The February 2018 audit report released by the Social Security Administration (SSA) Office of the Inspector General reveals that the SSA failed to inform 82% of beneficiaries entitled both to survivor and their own benefits of the option to claim a larger benefit. In fact, the audit estimates that the SSA underpaid 9,224 widows and widowers who were age 70+ by approximately $131.8 million. (For more about why the SSA may be shortchanging widows/widowers in this way, click here).

What the Social Security Administration Might Not Tell You
As this CBS Moneywatch report explains it, the SSA (despite being required to do so) regularly fails to inform widows and widowers when they would be best served by filing a “restricted application.”

When you choose this claim option, you elect to claim your survivor benefits and delay applying for your own benefits until age 70. This delay allows your own benefits to continue growing by 8% annually from your full retirement age (also known as FRA, which is age 65 to 67, depending upon when you were born) up to age 70. Survivor benefits do not increase after FRA and can be accessed as early as age 60 at a reduced amount

According to the aforementioned Inspector General’s report, the additional benefits of filing such a restricted application can be substantial, as this example illustrates:

A widow turned 70 in August, 2015. Her combined social security retirement and survivor benefits through September totaled $39, 708. Had she been informed of and elected the option to delay her own retirement benefits until age 70, her total benefits would have increased to $52,708.

The Bottom Line
The transition to widowhood can be overwhelming. Facing irrevocable financial decisions without being provided the proper information makes it all the more so. But as daunting and distant as the journey may seem now, in your own time, with the proper guidance and support, you can move confidently forward to a new life.

Before deciding when to begin your social security benefits, consider consulting with a knowledgeable professional financial planner who will work as your advocate.

Kirsch & Associates is Here for You
Our team of CERTIFIED FINANCIAL PLANNERS™ and Financial Transition experts integrate technical expertise with an in-depth understanding of life-changing events. We will help you move toward making sound financial decisions while moving forward with confidence and a sense of purpose.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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