Podcast 106: Planning for Life’s Inevitabilities: Social Security and Loss

Join Gregory Ricks as he discusses the intricate details of Social Security benefits when a loved one dies. Learn how to handle the final check and more.

Get your complimentary guide to go with this episode:

By submitting your contact information, you consent to be contacted regarding retirement income strategies that utilize investments and insurance products.

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 01890342 – 11/23.

Gregory Ricks  00:03

Hey, welcome. I’m your host Gregory Rick’s a financial advisor here to answer your questions and help you win with your money.

We also have a complimentary download waiting for you on this topic if you go to www.gregoryricks.com/podcast106 Again, that is www.gregoryricks.com/podcast106

Gregory Ricks  00:25

Everybody that’s on this planet earth presently, will not be here in 100 years. 50 years from now, most of us aren’t going to be here, we are going to move on sometimes abruptly sometimes in a very long fashion. Sometimes comfortably, sometimes not. But it is going to happen. And we should plan for it accordingly, what you need to know about Social Security if a loved one dies, and and the how is the final check handled. And I first noticed this when I was young and dad was killed as long time ago now, and left us with lots of decisions and mom with big decisions back then. And I just noticed that especially the day of the funeral, so bobble was kind of that disruption, and I felt that went a couple weeks, sometimes this bubble probably is just there for a few days for you. But then you’ve got to step back in to the lane and keep going because rest of the world is going by. And what I noticed then is like oh my god, we’re going through this, this is so difficult, so much emotion, everything’s come to a halt. But just like nobody else notices what we’re going through what we’re having to deal with, and and then at some point, that bubble goes away, and it’s not there too long, then you got to step back in the line because you got to go back to work you got to deal with with the problems created from losing somebody really close to you. This could be a parent could could be a spouse could be a child, you know, just what how it could be a business partner in your business. And you’ve got that bubble, which is that disruption because you’re having a stop for this. And everything else just keeps going. And then you have to catch back up. When when that bubble ends. So when you lose somebody really close, and what I will talk about is a loved one dies, what do you need to know about Social Security? Because that question is coming up? What does Social Security know? You know, do I have to tell them? Is the cheque gonna keep coming? Well, let’s talk about that. The first issue I will cover is what to do with the final Social Security check for the deceased. First, Social Security checks are paid one month behind. So for example, the check you get in June is the benefit the payment for May. If they live if that person lived the entire month of May, then as to how security works because it’s paid in their rear. So if you’re alive for that whole month, there’s a benefit that’s paid out for that second, Social Security benefits have never been prorated. And we’ve talked about before how this lack of proration can help you out when somebody first starts getting Social Security. For example, if you took benefits at age 66 And you turned 66 on June 28, you would get a check for the whole month of June even though you were only 66 For the first for only three days of the month. On the other hand, if your spouse dies on June 28, you would not be do those proceeds of that June Social Security check even though he or she was alive for 28 days of the month. But there’s a flip side to the perceived drawback to Social Security’s proration rules, it could be good news use for any survivors do benefits on on the deceased Social Security account. Let’s say that bill died on June 28. If his wife Sarah was do the widows benefits, she would be paid those benefits for the whole month of June. Even though she was a widow for only three days of the month, so to repeat, when somebody dies, the Social Security check for the month of death must be returned. But that’s only if you get the check in the first place. So, you know, that’s one of the questions is, what do I have to call them? Probably Probably not, there’s a very good chance that check won’t even show up in the deceased bank account. There’s all kinds of computer matching operations that goes on between various government agencies and banks. So if the Treasury Department learns of a person’s death and time, they won’t even issue the Social Security benefit. Or if the check was issued, the bank will likely intercept the payment and return it to the government before it’s even hits the deceased checking account. In other words, you usually don’t have to worry about returning any social security checks, it’s almost always done for you. Because one of the things I always kind of add in if you keep getting checks, don’t spend that money, because they’re, they’re going to want it back. But there can be a little twist to this scenario, though. For example, let’s say Henry died on July 2. And let’s further say that his social security check was normally sent to him on the third of each month. In other words, Henry just died before a Social Security check was deposited into the account, because he was alive the whole month of June, that means he was due the money from the June check for that June check. And now his widow or is the state is due that money. So that June Social Security benefit would have to be returned to Social Security Administration, then it will be re issued to the widow or the state. So you see, they were do that cheque from May was paid to them in June, but they died in June, before that cheque was sent to them, that check is going to go back because they’re they died, they can’t receive the benefit. Because they died, they does. They earned the benefit, but they can’t receive the check. So that checks gotta go back. And then that checks gonna be reissued to the beneficiary, which may well be the spouse I know. It’s a it’s a joint account it went into, yeah, but it’s got to be re issued to the beneficiary. If there’s no spouse, then it would be say the children are equal beneficiaries, then it would be split up and dispersed to the children in that case. So that’s something to understand that, yeah, they earned it, it’s going to be deposit because they live last month is going to be deposited. And if it’s deposited, it’s going to be taken back. But it’s probably not going to be deposited calls to the systems. One of the things typically, the funeral home gives out notification, but there’s all the systems that are crossing now that that pretty much takes care of that situation for you. We we kind of think of that as that $255 is a burial benefit. But is it a burial benefit. That’s not what it was intended for. Maybe 50 years ago, it could have paid for a burial. I assure you, it cannot today, but there is a $255 benefit. But but it doesn’t go to the beneficiaries either. And just to kind of quickly get you up to speed once the Treasury Department learns of a person’s death. They won’t even issue the Social Security benefits or if the check was issued, the bank will likely intercept the payment and return it to the government before it even hits the SES checking account. In other words, you usually don’t have to worry about returning any social security checks. It’s almost always done for you. So an example if they died a few days into the month. They lived through the entire month last month, so security’s paid a month in the arrears that will generate a check for this month because it’s last month, but they died this month. So security is going to take that money back or stop it, because they were not live to receive it this month. So it’s going to be reissued to the beneficiary.

Gregory Ricks  10:24

So if it’s the spouse, they’re gonna take it back and then reissue it. And essentially, that’s the protocol, they don’t do a prorated amount, you’ve got to be alive for the whole month to generate that benefit. And then you die, then that benefit will be paid out, but it will be issued to the beneficiary. But there can be a little twist to this scenario, though, for example, to let’s say that Henry died on July 2. And let’s further say that his social security check was normally sent to him on the third of each month. In other words, Henry died just before his social security check was deposited into his bank account, because he was alive the whole month of June, that means he was due the money from that June check. And now his widow or his estate, is due that money. So that June Social Security benefit would have to be returned to Social Security Administration, then it will be re issued to the widow or the estate. There is a form that needs to be filled out to get that to happen. Talk to an SSA rep, Social Security Administration rep. About that. So far, we’ve been talking about dealing with the last Social Security check that was sent to the deceased. And I think it’s important, I don’t often talk about that. But there is a process that plays out to there. It’s just it’s kind of unknown, like what do we do? Do we have to call most of that is automatic, but you’re going to need to call Social Security Administration, because they’re going to take that check back and reissue it to a beneficiary. So there’s a form that needs to be filled out. So now let’s get to talking about Social Security survivor benefits that might be due unless they are do higher benefits on their own social security accounts. Widow widowers are do full benefits at their full retirement age or reduced benefits as early as age 60 If they’re not working. But most most common scenario involves couples who were both getting Social Security benefits at the time of death of one of the spouses. The easiest way to explain what happens is with examples, so let’s use Fred he died. He was getting social security retirement benefits and his wife Wilma was getting just a spousal benefit. In other words, she didn’t have enough work credits to get her own social security benefit. In this case, the process is pretty simple. No widows application is required. Wilma simply notifies Social Security of Fred’s death, and they just push a few of their buttons or flip some switches so to speak, to switch her from wife’s benefits to widows benefits as a part of the process, she may have to provide a copy of the death certificate may have to because they may have already been informed. So Social Security will already have some proof of death in their files. Assuming Wilma was over full retirement age, she will start getting whatever Fred was getting at the time of death. But if he started Social Security at age 62, Wilma would actually get a little bit more little secret here. Fred would have been getting a rate equal to 75% of his full benefit. If he had started at 62 and Wilma, get this wellness guaranteed at least 82% of his full benefits so she will start getting a little bit more. In that case, if Wilma was getting her own retirement benefit that was less than Fred’s right she will get bumped up to that higher amount, and she would have to file an application to get those widows benefits. It’s really not very hard. There’s one little twist widows claims cannot be filed on line. So Wilma would have to contact Social Security at 1-800-772-1213 I know you weren’t expecting me to give that number there, it’s 1-800-772-1213 to file her claim over the phone. In addition, a death certificate Wilma may also have to provide a copy of her marriage certificate.

Podcast Intro / Outro  15:44

Thanks so much for listening to ask Gregory where we answer your financial questions. You can find us anywhere Podcasts can be found and on YouTube and Facebook Live every Saturday from 10 to 1. We also have a complimentary download waiting for you on this topic. If you go to www.gregoryricks.com/podcast106. Again that is www.gregoryricks.com/podcast106

Investment Advisory products and services are made available through a wealth management LLC a registered investment advisor. insurance products are offered to the insurance business Gregory Rick’s and associates at wealth management does not offer insurance products. The insurance products offered by Gregory Ricks & Associates Inc are not subject to investment advisor requirements investing involves risk including the potential loss of principal any references to protection, safety or lifetime income generally refer to fixed insurance products never securities or investments. Insurance guarantees are backed by the financial strength and claims paying ability of the issuing carrier This podcast is intended for informational purposes only it is not intended to be used as a sole basis for financial decisions nor should it be construed as advice designed to meet the particular needs of an individual situation Gregory Ricks & Associates is not permitted to offer and no statement made during the show shall constitute tax or legal advice our firm is not affiliated with nor endorsed by the US government or any other governmental agency. The Information and opinions contained here and provided by third parties have been attained by sources believed to be reliable, but the accuracy and completeness cannot be guaranteed by Gregory Ricks & Associates. Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increase the taxable income from the Roth IRA conversion may have several consequences, including but not limited to, a need for additional tax withholdings or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions with your IRA. Neither a wealth management or advisors providing investment advisory services through aid and wealth management recommend or facilitate the buying or selling of cryptocurrencies third parties and guests of the show are not affiliated with nor do their opinions reflect those of Gregory Ricks & Associates or AE Wealth Management provides services without regard to political affiliation. And the views of individual advisors do not necessarily reflect the views of at wealth management. We are Ask Gregory.