Government programs are notoriously confusing and Social Security is among the most difficult to navigate. When to apply, which types of benefits are available to you, and how much you will receive are all difficult questions to answer without assistance.
As one of our clients recently learned, an experienced financial partner is vital to understanding the complex rules and nuanced application criteria of the Social Security program. This case study will cover the challenges he faced, the benefits he missed, the amount he recovered, and how you can avoid a similar situation.
Case Study Rationale: Why study and share this situation?
Following the loss of a loved one – particularly a spouse – there are many financial tasks that need to be completed. Each couple’s financial situation is unique and, therefore, the tasks the surviving spouse needs to complete are different. This makes it difficult to know if you are doing everything “right” and leaves plenty of room to make a simple misstep that could cost you money in the long run.
I’m Pat Burris, CFP®, Social Security and Medicare Specialist at Meld Financial and I recently had the opportunity to help a client overcome one of these costly missteps. I hope that sharing that story can help you to:
- avoid a similar misstep in your own financial life.
- understand the value of a second opinion on government benefits from an experienced financial advisor.
- gain the tools to get your own personalized Social Security analysis.
The Client: A Widower Saving for Retirement
For the purposes of this case study, I will refer to the client as Joe Smith. Joe lost his wife several years ago to a tragic disease. During her illness, the Smiths depleted their emergency fund and part of their retirement accounts to cover the costs of her treatment and some expenses for their adult children.
When I met Joe, he was working hard to replenish his emergency fund and save for his upcoming retirement. Although Joe was past his Social Security Full Retirement Age when we met, he had not claimed Social Security retirement benefits and planned to wait until age 70 to retire and claim his maximum benefit.
The Problem: Confusion Over Qualification Criteria Left Survivor Benefits on The Table
Following his wife’s passing, Joe visited his local Social Security office to report the death and gather information about benefits to which he or his children may be entitled. He was told that he qualified for a $255 death benefit, but Survivor Benefits were not mentioned.
Joe accepted the guidance of the local Social Security agent and left under the impression that he did not qualify for any additional benefits. For several years, Joe continued to save and work toward retirement, unaware that he was leaving Social Security Survivor Benefits on the table.
The Solution: A Personalized Social Security Analysis Revealed Unclaimed Benefits
Later, Joe attended a seminar where I discussed various types of Social Security benefits – including Survivor Benefits. He listened to the criteria and began to wonder if he qualified.
Joe contacted me after the seminar and, after learning the basics of his situation, I suggested we meet to discuss his Social Security filing strategy and retirement plan. During our initial meeting, I learned more about his situation and determined that he met the qualifying requirements for Social Security Survivor Benefits.
I let Joe know that Social Security benefits can be backdated 6 months in certain circumstances and encouraged him to visit his local Social Security office as soon as possible to claim them. Joe visited his local office 3 days later and began the application process.
The Social Security office had most of his information on file from his previous visit and the meeting went quickly. The representative he met set a phone appointment for one month later and I encouraged him to ensure that his benefits would be backdated 6 months from the time of his in-person meeting, not the phone call.
The Outcome: Additional Income Plus an Emergency Fund
Joe’s application for Social Security Survivor Benefits was accepted and he received a lump sum payment of $11,465 in retroactive benefits. With a recent cost-of-living increase he is also receiving a monthly benefit of $1,667 and will continue to do so until he applies for his own, higher, retirement benefit at age 70. The lump sum and monthly payments helped Joe re-establish an emergency fund prior to retirement.
After working with Blake May, J.D., CFP®, one of my colleagues at Meld Financial, Joe received his Financial Fingerprint® – a comprehensive wealth management plan that covers the most important aspects of a successful retirement. The plan showed that Joe’s newly established emergency fund would help him retire comfortably without the worry that unexpected expenses would derail his plan.
Overall, a second opinion about his Social Security filing strategy helped Joe gain a substantial lump-sum and monthly payments he otherwise would have left on the table. Today, Joe is approaching retirement with peace of mind knowing he has cash set aside to cover the unexpected and a team of financial professionals to help him achieve retirement success!
Get Your Personalized Social Security Analysis from Meld Financial
If you believe you may be leaving Social Security benefits unclaimed, contact Meld Financial for a second opinion and a personalized benefits analysis. A consultation costs nothing, but it could help you recover thousands in unclaimed benefits – like it did for Joe.
In addition to Social Security, our team will review your entire financial situation and develop your Financial Fingerprint®. This nimble plan brings together the most important aspects of your financial life into one easy-to-understand plan. Best of all, it is backed by our experienced team of tax, legal, and investment professionals.
To learn more about Financial Fingerprint® or to schedule your personalized Social Security analysis, contact us today.
