Social Security Optimization: Tailored Solutions for Every Stage of Life

Social Security can be a cornerstone of your retirement plan—if you make informed decisions. At Beacon Financial Pathways, we guide individuals and families through the rules, strategies, and estate considerations that ensure the highest possible lifetime benefits and a smooth transfer of assets to loved ones. Whether you’re filing on your own record or looking to protect your spouse (or ex-spouse), we’re here to help.

Your Own Social Security Retirement Benefits

Understanding Primary Insurance Amount (PIA)

  • Your PIA is the base figure the Social Security Administration (SSA) uses to determine monthly benefits at Full Retirement Age (FRA). It’s derived from your highest 35 years of earnings.

Claiming Early vs. Waiting

  • Early Claiming (62–FRA): Each month you claim before FRA results in a permanent reduction in benefits.

  • Waiting Beyond FRA (up to 70): Each month you delay beyond FRA increases your benefit by up to 8% per year until age 70.

Impact of Taxes

  • Depending on your total income (including pensions and investments), up to 85% of your Social Security benefits could be subject to federal income tax. Careful planning can mitigate these taxes.

WEP & GPO: Special Provisions for Certain Individuals

Windfall Elimination Provision (WEP)

  • What It Is: A rule that reduces Social Security retirement or disability benefits for those with pensions from non-covered employment (e.g., certain government positions not subject to FICA taxes).

  • WEP-PIA vs. WEP Guarantee:

    • WEP-PIA is the reduced PIA using a modified formula.

    • The WEP Guarantee ensures the reduction can’t exceed half of your non-covered pension amount.

Government Pension Offset (GPO)

  • What It Is: A rule that can reduce spousal or survivor benefits by two-thirds of your government pension if you earned that pension in a job not covered by Social Security.

Key Distinctions

  • WEP reduces your own retirement (or disability) benefits if you have a non-covered pension.

  • GPO reduces spousal/survivor benefits if you have a non-covered pension.

  • Survivors generally do not lose out on benefits because of WEP (it doesn’t carry over once the pension holder passes away).

Estate & Right of Survivorship for Individuals

Even if you’re claiming on your own record, estate planning can intertwine closely with how your Social Security benefits (or the distribution of other assets) help loved ones.

First Right of Survivorship

  • Ensures if something happens to you, your chosen beneficiary (like a spouse or a designated person) maintains immediate rights to assets.

  • This prevents legal disputes and secures the continuity of financial support.

Caretaker Access & Compensation

  • If you become incapacitated, your designated caretaker(s) can access funds for health, wellbeing, and daily care needs.

  • They receive a reasonable compensation for their services until you pass.

Distribution of Personal Property

  • Personal items can be allocated to specific individuals (e.g., children, siblings, or friends).

  • Any unclaimed items after a set period may be sold; proceeds can go into a trust or split per your instructions.

Example

Ken and Kara have first choice of certain items. After 45 days, other relatives may select remaining items. Anything unclaimed is sold, and proceeds split among designated beneficiaries.

For Spouses & Survivors

Spousal Benefits

Eligibility & Calculation

  • If you’re married, you can receive up to 50% of your spouse’s PIA if you wait until your FRA.

  • Claiming Early: Spousal benefits claimed before FRA face a permanent reduction, calculated differently from your own benefits.

    • For the first 36 months before FRA, the spousal amount is reduced by 25/36 of 1% per month.

    • Beyond 36 months, the reduction is 5/12 of 1% per month.

Ex-Spouse Scenarios

  • Divorced individuals may claim on an ex-spouse’s record if:

    1. The marriage lasted 10+ years,

    2. You are unmarried, and

    3. Your ex-spouse is eligible for Social Security.

  • After being divorced for 2 years, you can claim spousal benefits regardless of whether your ex-spouse has filed.

Example

 

Mary & John: John’s PIA is $2,000. At FRA, Mary’s spousal benefit is $1,000 (50%). If Mary claims 36 months early, a 25% reduction applies, lowering her monthly benefit to $750.

Survivor Benefits

What Are Survivor Benefits?

  • Upon a spouse’s death, the surviving spouse can receive up to 100% of the deceased’s PIA (with adjustments depending on the survivor’s age and other factors).

WEP Does Not Apply to Survivor Benefits

  • If the deceased spouse had a pension from non-covered employment, WEP does not carry over to survivor benefits. Survivor benefits are typically calculated on the full, unadjusted PIA.

Estate Provisions & Care Instructions

  • Caretaker Access: The surviving spouse or designated caretaker (e.g., Kara Munsey) has the right to access necessary funds for health, wellbeing, and daily care.

  • 50/50 Split: Financial accounts can be split equally among designated heirs—if one passes, the other receives 100% unless otherwise noted.

  • Donations & Memorabilia: Large-value items (e.g., Bill Davis Sheep Statues) may be donated to a charity for auction. Specific items (e.g., custom putters, tools, or hunting trophies) may be allocated to named individuals.

Special Considerations: Remarriage, Long-Term Care, & Temporary Trusts

  • Remarriage: If you remarry, spousal benefits on a former spouse’s record generally end—unless specific conditions apply (e.g., age 60+ for survivors).

  • Long-Term Care: Existing LTC policies do not override caretaker compensation. Both can coexist to provide comprehensive support.

  • Temporary Trust Account: To facilitate the sale of real estate or remaining personal property, a trustee can manage these funds until final distribution.

Putting It All Together: Our Process

  • Initial Consultation

    • We gather your financial details, Social Security statements, and any relevant pension information.

  • Benefit Analysis

    • Individuals: Calculate your best claiming age, factoring in potential WEP if you have a non-covered pension.

    • Spouses & Survivors: Show how spousal, survivor, or ex-spouse benefits could boost lifetime income, including timing strategies that avoid permanent reductions.

  • Estate Integration

    • Integrate right of survivorship, caretaker assignments, and distribution instructions.

    • Ensure that if something happens to you or your spouse, the surviving caretaker can pay for daily living and healthcare needs immediately.

  • Implementation & Ongoing Support

    • We help you file for benefits with the SSA or assist in setting up a temporary trust account.

    • We’re here to answer questions about GPO, WEP, or any life changes (e.g., divorce, remarriage, new caretaker designations).

Ready to Optimize Your Social Security?

Social Security is more complex than many realize, particularly for spouses, ex-spouses, and survivors. Proper planning can mean the difference between a comfortable retirement and unnecessary financial stress—especially when health and estate considerations are on the line.

Contact Beacon Financial Pathways today at (714) 224-4100, or click here to schedule a consultation. We’ll work with you to:

  • Maximize monthly benefits for individuals and couples.

  • Ensure first rights of survivorship and smooth estate transfers.

  • Navigate WEP/GPO rules, if applicable.

  • Provide caretaker compensation and distribution instructions, so everyone’s needs are met.

Don’t leave your financial future to chance—let us guide you to a secure and fully optimized Social Security strategy.

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