Make Sure Condolences Include the Offer to Help with Social Security

The fog of grief can leave the widowed and divorced vulnerable to bad advice and misinformation. They often need to make choices when they are less able to evaluate the financial ramifications and less likely to question authority, like the Social Security Administration (SSA).

It may seem more considerate to let people grieve and not suggest a meeting about their financial situation. But when Social Security is involved, it’s best to accompany your condolence message with a reminder to contact you before dealing with the SSA.

A case I recently handled of a family friend proved that.

Separated But Still Married

Jill and her husband, Jack (not their real names), separated, intending to divorce, several years ago. After a tumultuous separation, Jack refused to sign their divorce papers, leaving them legally married and Jill without any alimony or financial support from her husband.

Jill struggled to make ends meet and began juggling multiple part-time jobs. She scraped by for several years. We had spoken a few times about her Social Security filing options for when the time came. She was desperate to sit down with me to see if there was anything she could do to relieve some of her financial burdens once she was 62.

Then out of the blue, Jill received a phone call informing her that Jack had passed away a few months earlier. She had no idea that he had even been sick. My reaction was primed by my knowledge of her financial need and Social Security rules.

“Survivor benefits may be the golden goose you’ve been praying for,” I told Jill, who didn’t even realize she would be entitled to any benefits upon her estranged husband’s death.

I was ready to run her case through the Social Security planning software I use to help financial advisors and their clients determine optimal filing strategies to maximize lifetime benefits.

The SSA Provides the Wrong Information

Before we could meet, Jill called up her local SSA office to ask about what benefits she was entitled to. The information the representative provided was categorically false.

The rep said she could only file for survivor benefits once she turned 64. The minimum filing age for survivor benefits is 60, although the benefit is substantially lower than what someone receives by waiting until their survivor full retirement age (FRA).

Fortunately, Jill relayed to me what she’d been told. I quickly corrected the information about the eligibility age for survivor benefits; then, we ran her information through the software. What we discovered was that the most beneficial filing strategy for Jill would be to:

• File her retirement benefits now at age 63. This way, she’ll be eligible for about $1,100 a month. Since she will continue to work, her benefit may be adjusted by the earnings limit that applies to people who haven’t reached their FRA.
• Then she can wait until her survivor FRA when she can switch and collect a benefit based on Jack’s earnings record. That would total, without any future cost of living adjustments, nearly $2,400 a month.

She began to cry as soon as she saw the software analysis results.

“This is life-changing money, Alyson! I can stop working one of my jobs now and afford to stop working myself into exhaustion,” she said.

How to Provide the Best Financial Advice

Social Security rules are almost legendary for their volume and their complexity. It’s easy for someone, even someone who works for the SSA, to make mistakes.

The right software, though, knows the rules.

Let your clients know that you are available to help them sort through Social Security if they are widowed or divorcing their spouse.

Consult your firm’s internal specialist in government programs and benefits or with an external consultant available to you. If you speak to the SSA, ask for the citation from the program rules for any information they provide you or a client.

As Jill’s case illustrates, a lot can depend on it.

Read the full feature on FA Magazine here.