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Social Security & The Big Disconnect

By Beau Henderson, RICP®, CLTC®, Certified Financial Fiduciary®

Social Security is one of the most important pillars of retirement for millions of Americans across the country. Yet many still don’t understand how their benefits work. This is especially true when it comes to Survivors Benefits, which are often overlooked and under-utilized. The truth is that there’s a huge gap between what widows receive and what they are actually entitled to. Don’t miss out on benefits that are rightfully yours. Make sure you know how to navigate the big Social Security disconnect.

How We Helped a Widow Nearly Triple Her Income Overnight

There is perhaps no better example of the Social Security disconnect than with our client Coralee, who came to us for help with her Survivors Benefits in 2019. After losing her husband at age 55, she went to the local Social Security Administration office to ask about spousal benefits. She left empty-handed believing she wasn’t eligible. 

After a few months, she had to move in with her sister to reduce her living expenses. At age 63, she was working full-time earning only $15,000 a year. Things were very tight for Coralee and her sister—until she attended one of my Social Security workshops. 

After learning more about her benefit eligibility, Coralee was able to go back to the SSA office and nearly triple her income in just one follow-up conversation.

Coralee didn’t believe her benefits could change, and many widows across the country are in the same boat. If the right timing and the right information could change Coralee’s life, it can change yours too.

What You Don’t Know Will Cost You

At the time Coralee spoke with the SSA, it was technically true that she wasn’t eligible for Survivors Benefits at age 55. But she left that conversation with the impression that she would never be eligible for a spousal benefit. What she didn’t know was that she would be eligible for benefits when she turned 60.

SSA Employees Can’t Give You Strategic Advice

Employees at the Social Security Administration are prohibited from giving anyone strategic advice whatsoever. They can only give you information on your current eligibility and how to apply for benefits, if eligible. They cannot provide future information about when you may become eligible. Because of this, it is crucial for widows to understand how and when their benefits will kick in. 

Overview of Survivors Benefits

Even if you were denied Survivors Benefits at one time, you may become eligible at a later date. In general, a surviving spouse can receive a benefit at age 60 or older. If you have a qualifying disability, you become eligible for benefits at age 50. If you are caring for a spouse’s child who is under age 16 or disabled, you can receive benefits at any age.

Even surviving ex-spouses can be eligible under certain circumstances. 

Survivors benefits are available for surviving spouses of workers who have paid into the Social Security system. How much you will receive depends on when you file for benefits and what other benefits you are eligible for. For those already receiving retirement benefits, you can only receive Survivors Benefits if your spouse’s benefit is more than what you are currently receiving. 

If you’re not currently receiving retirement benefits, then your Survivors Benefit is based on your age:

  • Full retirement age = 100% spousal benefit amount
  • Over age 60 but less than full retirement age = 71.5%–99% of spousal benefit amount
  • Age 50 and disabled = 75% spousal benefit amount
  • Any age and caring for a child under the age of 16 = 75% spousal benefit amount

Working could also reduce your benefits, depending on how much money you make.

In 2022, the annual earnings limit is $19,560 if you’re under full retirement age. If you’re going to reach full retirement age in 2022, the limit on your earnings for the months before full retirement age is $51,960. Once you reach full retirement age, there’s no limit to how much you can earn and still receive your benefits.

Keep in mind that you cannot apply for benefits online. You must apply either over the phone or at your local SSA office. 

Don’t Miss Out on Your Benefits

Armed with this information, Coralee made another appointment with her local SSA office. After providing the necessary paperwork, she discovered she was eligible for spousal benefits under her husband’s work record. Her benefits totaled $2,250 per month, or $27,000 per year. In just one follow-up conversation with the SSA, she was able to nearly triple her income based on the information provided in my seminar. 

Find Out if You’re Eligible for Survivors Benefits

This is just one example of the Social Security disconnect. Don’t miss out on life-changing benefits because of a lack of information or bad timing. At RichLife Advisors, we can help you maximize your benefits and achieve financial comfort and confidence. If you would like to learn more about your Social Security eligibility and our holistic retirement planning process, click here for our free Social Security optimizer analysis. It’s never too late to bridge the Social Security disconnect and make the most of your benefits.

About Beau

Beau Henderson is founder and visionary of RichLife Advisors, a locally owned and operated firm of retirement planning experts that focus on helping those approaching retirement create a comprehensive strategy to “live their definition of a RichLife.” Beau uses a holistic approach to financial planning, with the goal of improving his clients’ relationship with money while they live their unique definition of a fulfilled, meaningful retirement with purpose. He creates strategies his clients can understand, which provide financial comfort and confidence. Ongoing education and training is a top priority, and Beau strives to educate clients and make an impact as their trusted partner.

Beau has a psychology degree from the University of Georgia as well as the designations of Retirement Income Certified Professional (RICP®), Certification for Long-Term Care (CLTC®), National Social Security Advisor Certificate Holder, Certified Financial Fiduciary® , Certified Professional Retirement Coach (CPRC), Certified Bucket Plan Advisor, Master Certified Success Coach, and Certified Master Behavioral Analyst. He is also an active member of Ed Slott’s Elite IRA Advisor Group℠ (an organization dedicated to the ongoing education and mastery of the latest retirement tax laws) and a best-selling author. In his free time, Beau enjoys podcasting, traveling, boating, fishing, and spending time with his daughter, Gwendolyn. To learn more about Beau, connect with him on LinkedIn.