Advanced Underwriting Consultants

Ask the Experts – February 14

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax questions posed by producers.  Here’s the question of the day.

Question: I have a client whose husband died at 70. She is 62 and entitled to Social Security survivor benefits. Can she collect survivor benefits now, and then switch to her own retirement benefits later?

Answer: Yes, according to one Social Security expert.

Your client could begin receiving her survivor benefits immediately without it adversely affecting her future retirement benefits. Keep in mind, however, that since she has yet to reach full retirement age (FRA), her survivor benefits would permanently be reduced. But this wouldn’t be much of an issue if she’s planning on switching over to her own retirement benefits at age 70.

This technique allows the surviving spouse access to Social Security funds now—the survivor benefits—while allowing the surviving spouse to continue to earn delayed retirement credits (DRCs), which increases her own Social Security retirement benefits by 8 percent per year until she reaches age 70.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.