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tem can be very straightforward. An online visit also lets one sidestep the current three-and-a-half-hour wait time to talk to a Social Security representative, Franklin said— assuming the call doesn’ t end prematurely disconnected.
“ But there are some cases, like applying for a survivor benefit after your mate or ex-mate dies, that can’ t be completed online. Now, luckily, you can do it by telephone. But pack your patience, and be prepared to wait.”
Advisors should be up to date on what’ s new in the world of Social Security, Franklin said. Many of the rules stay the same from year to year, but 2025 will see some changes.
For instance, people getting benefits just got a 2.5 % inflation adjustment, which went into effect in January. But the payroll taxes that help fund the program, FICA taxes, are going up for higher-income clients who are still working— because the taxable wage base rose about $ 8,000, from $ 168,000 last year to about $ 176,000 this year, she said.
A new group of workers are also getting benefits. Under past rules, public employees who paid into certain state pensions were denied Social Security benefits under two rules, the Windfall Elimination Provision and the Government Pension Offset. But those rules were repealed in January, and millions of workers should be getting lump sum payout checks back to January 2024. Going forward, they’ ll receive larger checks each month, Franklin said.
For workers affected by the Windfall Elimination Provision, the Social Security system has already processed about 80 % of claims. But workers affected by the Government Pension Offset may have to apply for their benefit.
“ So that is your homework,” Franklin told advisors.“ Reach out to your clients who have been affected by these rules and make sure they’ ve applied if they need to.”
In fact, now is a good time to reach out to all clients who will be claiming their Social Security benefits soon, as they are likely nervous about the ups and downs of the stock market, as well as the negative headlines about inflation, tariffs and a potential recession, she said. Despite their worries, for most people it’ s still best to delay claiming benefits until they’ re age 70.
“ If you need the money, go ahead and claim it. If you’ re in poor health and not likely to live a long time, go ahead and claim it,” she said.“ But if you are claiming Social Security benefits early just out of fear, out of what might happen in the future, it’ s just like your clients wanting you to cash out in a down market. The only thing you have guaranteed is you have locked in a loss, and, to me, that is not a smart decision.”
Typically, married couples have more decisions to make about their Social Security benefits because there are two lives
involved and three possibilities for benefits— the standard Social Security benefit for workers, a spousal benefit for nonworking spouses and a survivor benefit for a widow or widower.( Singles pretty much just have their own Social Security, unless they’ re divorced, in which case they might be entitled to a spousal or survivor benefit.)
Where many advisors go astray, Franklin said, is in not being fully schooled on the specifics of the various types of benefit. For example, it’ s practically a mantra in the industry that clients should wait until 70 in order to get the largest payout— but only for a worker’ s retirement benefit, she said.
“ Delayed retirement credits do not apply to a spousal benefit. They also do not apply to a survivor benefit,” she said.“ I cannot tell you how many financial advisors have said to me over the years,‘ Well,
I told my widow client to wait until 70 to get the biggest benefit possible.’ No, no, no. It doesn’ t get any bigger.”
But if one member of a couple waits until age 70 to get the largest benefit possible and then dies, the survivor benefit will be worth 100 % of what that deceased worker was collecting, including those delayed retirement credits.“ So this is the major strategy for married couples. You have one wait until 70. It’ s often the bigger earner, who is often the husband, who is sometimes a few years older and is probably going to die first,” she said.“ By having him maximize his benefit at age 70, you have now locked in possibly the largest survivor benefit possible.”
“ If you are claiming Social Security benefits early just out of fear, out of what might happen in the future, it’ s just like your clients wanting you to cash out in a down market.”
— Mary Beth Franklin, RetirePro
And while it makes sense in many cases to have one spouse claim later, it also can make sense for one spouse to claim earlier, even at 62. While that spouse’ s benefit will be reduced, and technically for the rest of his or her life, the benefit can bring some cash flow into the household while the other spouse waits until 70, Franklin said.
What many people don’ t know, even advisors, Franklin said, is that a spouse can freely switch from their lower retirement benefit they’ ve already started taking at retirement age to a higher survivor benefit after they’ ve been widowed. That’ s because the two benefits come from different programs within Social Security.
“ As financial advisors, knowing some of these basic rules and the difference between retirement and survivor benefits can be critical to the long-term financial health of your clients.”
28 | FINANCIAL ADVISOR MAGAZINE | JUNE 2025 WWW. FA-MAG. COM