An authority on Social Security benefits claims that if a widow uses the incorrect technique while seeking life insurance, she risks losing a significant amount of money.
According to William Reichenstein, director of research for Retired person earnings, if the widow has an unusually short lifespan, she should compare her highest survivor advantage and her pension benefits at 70 years of age and embrace the bigger of the two quantities.
The widow must consider those choices to receive the highest possible lifelong Social Security payments, according to Reichenstein, who spoke at the Invest in Women event organized by the Financial Advisor journal. In comparison, it may be enticing to take the greater of her rescuer advantage and retirement advantage upon the passing of her partner.
“Check your mathematics in every situation. Then, when her husband passes away, don’t simply accept the greater of her lifetime pension and surviving income, said Reichenstein.
A widow must navigate several intricacies to maximize her Social Security lifelong payments.
He advises financial advisers on choosing the best course of action to maximize a widow’s lifetime advantages.
- Widows70+
According to Reichenstein, in this circumstance, the partner should compare her retirement payments to her social security payments and choose the larger of the two sums. Her lifetime most excellent value will be that amount, and she should start receiving it immediately.
- Widows between both the age of 70 and retirement for social security advantages
In this case, Reichenstein initially considers that the woman has not yet started receiving retirement benefits. However, the partner should begin receiving survivor benefits when the high earner passes away and move with her benefits at age 70 if it is more significant, according to him.
According to Reichenstein, if the survivor benefits were $2,400 per month, she should start receiving them and keep doing so throughout her life since they would be greater than her retirement advantages at age 70.
In a different situation, the 66-year-old widow is already pursuing retirement benefits at the time of her husband’s death. Because she filed for payments nine months before her FRA, if she started receiving payments five months ago, her benefits would be reduced to $1,710, or 95% of her PIA of $1,800. However, Reichenstein stated she might use one of three tactics to increase her lifetime benefits:
• She may first start receiving $2,000 in month-to-month survivor payments, which would last the remainder of her life.
• Second, she continues receiving her retirement advantages of $1,710. Still, when she reaches her FRA for retirement payments (66 months), she shuts down and instead, starts receiving survivor benefits of $2,000.
• Withdrawing her claim for retirement benefits would be the third tactic. Because she started receiving benefits less than a year before, according to Reichenstein, she has a single right to withdraw all her retirement benefits applications because she began receiving benefits less than a year early.
- The death of the widow’s higher PIA husband and she is younger than her FRA for survivor benefits
Reichenstein assumed that the widow’s age at the time of her husband’s death was 62, with a PIA of $1,800 and FRAs of 67 for all benefits. Her maximal surviving payments were $2,000 per month from the beginning of his income at or after his FRA. She starts receiving survivor payments, which are reduced by 20.4% to $1,592 since she received them five years before her FRA for death benefits.
- A widow whose lower PIA husband passes away and who is younger than their FRA for survivor benefits
When her spouse passes away at his FRA, she is 62 years old with a $2,000 PIA and FRAs of 67 for all benefits. He had a $1,500 PIA but did not start receiving pension payments. One option, according to Reichenstein, is for her to begin receiving pension payments of $1,400 per month at age 62 [$2,000 multiplied by 0.70] and then switch to survivor benefits of $1,500 at age 67. The alternative is to start receiving $1,194 in survivor benefits today, which are reduced for filing a claim earlier. Then, she should begin receiving her $2,480 pension payments at age 70, three years’ worth of retroactive credits. This plan will provide the most lifetime advantages if a woman survives until at least 72 years old.
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Bio:
Craig E. Vukich is a 35 year retirement specialist and Financial Advisor who has helped thousands of clients all over the country with their investment portfolios and retirement strategies.
In that time, Craig has also helped seniors and retirees with their Medicare options as healthcare continues to be one of the most confusing issues facing people today.
Personally, Craig lives in Beaver Falls, Pa with his beautiful wife and childhood sweetheart Barb and their lovely daughter Shalyn.
Craig is a graduate of Westminster College which is about an hour north of Pittsburgh. Craig is a recreational golfer and traveler and Pittsburgh sports fanatic.
Disclosure:
This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.
