Don’t overlook the basics of Social Security. Even rudimentary knowledge can turn advisors into instant superstars in their clients' eyes.
Kasha Clark, a Raymond James financial advisor with First Tech Federal Credit Union in Beaverton, Oregon, wowed a client when she informed her that she could collect Social Security benefits on her deceased husband's work record.
"I never even would have known that I was missing out on this benefit," the incredulous client told Clark.
The widow, then 63, met with a Social Security agent and was able to begin taking her late husband's monthly benefit of approximately $1,800, which was about equal to what her benefit would be if she waited until her full retirement age at 66. The client, however, opted to defer her own benefit until she turned 70, at which point her benefit would be approximately $2,700 a month.
The claiming strategy notably boosted the widow's retirement income. If she lives to 85, she will have received roughly $637,200 in benefits. Had she merely claimed her benefits at 66, she would have received only $410,400, leaving a considerable $226,800 on the table.
"She had no idea," Clark said of her client. Clark estimates that about half of clients are unaware that they can claim spousal benefits before claiming their own benefit at their full-retirement age or later at 70. She said that the lack of awareness is prevalent among many of her clients but particularly among women who tend to abdicate the responsibility of working with an advisor to their husbands.
Like most widows, Clark's client was initially unwilling to talk about her late husband, who died suddenly from cancer two years after he retired at 61. The long-married couple had traveled the country in a fifth-wheel travel trailer prior to the husband's unexpected death.
"She was in shock after he died," Clark said. Still, Clark gently pushed her client to think about retirement planning and encouraged her to look into a widow's social security benefit.
The client was glad that she did. "You are personally responsible for making my retirement more secure by this suggestion alone," she later thanked Clark in an email.
Have you helped a client with a unique Social Security benefit claiming situation that you would like to share with readers? Please email me at firstname.lastname@example.org or call me at +1-212-803-8791.
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