3 Interesting Social Security Questions Advisors Asked This Year

But there's a big problem: As a police officer, his retirement is provided by a union pension. He did not pay into FICA, and therefore has no Social Security!

Action plan: Since her earnings record includes more than 20 years of zeros, the advisor will want to outline some options:

• Work until full retirement age to claim an unreduced benefit on her own record.
• Work until 70, then claim her maximum benefit.
• Discuss any possible trade-offs in lifestyle to create a viable plan.
• Confirm with SSA that her ex does not have any covered earnings.

Meanwhile, she needs to review her divorce decree terms:

• Is she entitled to a percentage of his pension?
• Did she already receive a lump-sum payout?
• Are any other payments due to her?

Can You Apply for Social Security in January of Your FRA Year?

The last off-the-beaten path question came from an advisor who was asked by a client, "If I reach my Full Retirement Age (FRA) in September, can I claim Social Security in January of that year and get my full (PIA) benefit amount all year?"

Ah, no. Creative idea, but full, unreduced benefits are only paid if you claim in your FRA month.

The client can claim in January, but that comes with a 5% permanent reduction to his benefit.

Action plan: Wait until September to claim Social Security.

Keep in Mind

Clients ask the most interesting questions or have unusual circumstances to consider. Those questions can take even the best advisors aback. Sometimes the advisor has to look for other dots to connect within the client's financial house to figure out the best course of action.

At the end of the day, make sure the client is looking at a work record where FICA was paid in. Encourage clients who think they may be entitled to more benefits to make an appointment with Social Security. And keep in mind there is always a reduction when claiming before FRA.