Here’s a news flash. Workers at the Social Security Administration sometimes make mistakes. It turns out that Social Security is actually pretty complex and even they have a hard time understanding all of the rules. Today I want to discuss a client situation that occurred recently with an SSN advisor.
The advisor was working with a recent widow. The late husband died at age 69 and had been delaying Social Security so he had never actually received a check from them.
Before he became sick he was going to delay until he was age 70 and maximize his benefit since he was the higher earner.
But when the widow went to the Social Security Administration she was told that since the deceased husband never actually claimed Social Security benefits, she would only be eligible for benefits as of his full retirement age at 66. This was a big shock to her because she didn’t think it mattered whether or not he was actually taking Social Security when he died.
Once calculated, this would have been about $600 less per month than the retirement benefit as of his date of death. Since the advisor had been working with these clients for many years, she began by questioning the local Social Security official that gave the information. This person refused to budge from the original position and said it would be a waste of time to verify with anyone else.
So the advisor began looking into problem on the Social Security website and by trying a variety of Google searches. She couldn’t quite find the right answer for this particular situation until she looked into the Mercer Social Security Guide and found the answer. She realized that it was correct for the spouse to expect those higher benefits.
The advisor and client decided to call the SSA customer service line and they immediately agreed that the advisor was correct.
I think there are a number of good learning opportunities in a situation like this.
- While you may not ever know every single rule regarding Social Security, it pays to know how to dig a little deeper when something doesn’t sound right.
- Have some resources handy that can help you find the answers to the difficult questions. Sometimes unusual situations are not clearly spelled out on the Social Security website.
- SSA employees are generally very knowledgeable and helpful. But just like any other profession, some will have more experience than others. Don’t hesitate to ask for a second opinion when you think there is a serious problem.
If you haven’t already requested your Social Security guide, please do it now. It’s a free guide courtesy of SSN. We want to help you give better advice to those clients getting ready to retire. Click on the link below and we will send one out to you at no charge.
Corey is SSN’s in-house consultant on tax planning. He shows advisors how to dig into complex strategies and consider the implications of taxes as clients are getting ready to retire.