When clients turn to Geyer Law for help in creating an estate plan, it’s very typical for Social Security benefits to be the last thing on their minds. Surprise! Social Security is interwoven in just about every decision seniors make when it comes to their own retirement and how they wish to benefit those they may someday leave behind.
Social Security Spousal benefits:
“A key question for you and your spouse to discuss is how long either of you expect to live,” cautions Fidelity Vice President and CFP® professional Ann Dowd. When one spouse dies, the surviving spouse can claim the benefits of the spouse with the higher Social Security benefit for the rest of his or her life. Because of this, for any couple with at least one member who expects to live into his or her late 80s or 90s, deferring the higher earner’s benefit at the outset of retirement might may sense. On the other hand, if both spouses have health issues, claiming their benefits early may make the most sense.
Social Security benefits for survivors:
Many people think of Social Security only as a retirement program, but some of the Social Security taxes you pay go towards survivors benefits for workers and their family. In fact, these benefits include:
- widows and widowers
- divorced widows and widowers
- dependent parents
Important things to know about these survivor benefits:
- A widow or widower can get Social Security benefits at any age if they take care of a child younger than age 16 or disabled.
- Unmarried children younger than age 18 (up to age 19 if they’re attending elementary or secondary school full time) can get benefits.
- Under certain circumstances, benefits can be paid to stepchildren, grandchildren, stepgrandchildren, and adopted children.
Two startling statistics:
- For many Americans, these survivor benefits exceed the amounts of life insurance coverage they have purchased!
- 50% of women collecting Social Security today are receiving part or all of their benefits based on their husband’s earning history and the decisions made around it.
While you are thinking about your Social Security, and your timing in terms of beginning benefits, don’t forget to consider Medicare. You can sign up for Medicare at age 65 regardless of when you choose to begin receiving Social Security benefits. In fact, Medicare recommends you sign up three months before age 65. If you don’t enroll when first eligible, that could affect your benefits, warn California tax advisors Gumbiner and Savett.
“While self-sufficiency is certainly an important part of our culture, decisions regarding retirement and estate planning are some that really should be informed by a knowledgeable professional,” is the message from one Pennsylvania law firm.
At Geyer Law, we couldn’t agree more. Our attorneys take a lifetime planning approach to take the mystery out of the estate planning process. Social Security is definitely part of that estate planning process.
– by Rebecca W. Geyer