Survivor Decisions

Gray Easterling
Gray Easterling

Recently, I had a client ask me a question concerning her eligibility for survivor benefits for Social Security. Social security and IRA’s can be two sources of confusion for the surviving spouse. Most people realize that a widow or widower is entitled to a Social Security survivor benefit that is equal to 100% of the deceased spouse’s benefit, as long as the survivor waits to full retirement age to collect. A decision to accelerate the payments will reduce the amount received. However, if you, as the surviving spouse, are also eligible for benefits, there are options. You can start collecting survivor benefits as early as age 60 and delay collecting your social security until age 66, which will give you a full benefit based on your earnings. The other option would be to start collecting your personal benefit at age 62 and then switch to your spouse’s benefit at age 66 or 70. Your choices can result in significant differences in the total dollars collected over time.  These are important decisions and need to be analyzed by someone well versed in the way Social Security works.


Inheriting an IRA can cause stress for non-spousal beneficiaries, according to information included in the February Kiplinger’s Retirement Report. If a non-spousal beneficiary wants to stretch IRA distributions over their own life expectancies, the required minimum distributions must be taken in the year following the year the owner of the IRA died. The distributions will be subject to income tax. Non-spouse beneficiaries cannot roll an inherited IRA into their own IRA. Instead, a separate account is set up with a title that includes the decedent’s name and the fact that the account is for a beneficiary, like “Jane Doe (deceased December 1, 2013) IRA, for benefit of Sister Jane”. It is also important the inherited IRA be split among the designated beneficiaries because RMD’s are based on the age of the oldest heir. If the IRA is not split and there is a gap in the ages of the beneficiaries, the time that the money can grow tax deferred is shortened. Another twist in the law occurs when there is a “non-person” beneficiary. The rules say that the amount due the “non-person” must be paid out by September 30th of the year following the owner’s death. If that share is not paid out and the account has not been split, the other beneficiaries will not be able to take withdrawals over their life expectancies. These are just a few of the issues related to inherited IRA’s. If the shoe fits, make sure that you meet with your tax advisor in a timely manner to receive help navigating the tax regulations that apply in this situation.


I was watching the public television fundraiser last week and one of the groups performing was the Vogues, from the 60’s, singing “Turn Around, Look at Me”. When I was romancing with that song in the background back then, my motives and hopeful outcome were quite different than what they are now. Remember these lines: “There is someone walking behind you, turn around, look at me. There is someone watching your footsteps, turn around, look at me. Understand that there’s someone who’ll stand beside you…and there’s someone who’ll love and guide you.  Turn around, look at me… Look at someone who really loves you. Turn around, look at me.” Age has its benefits, and when I hear these words now, not only do I wish that I could sing them to my most wonderful wife, but I also know that my God and Savior is singing them to me each and every day. From Psalm 105: “Give thanks to the Lord and call upon his Name; make known His deeds among the peoples.”



Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed.  This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal or investment advice.  FSC Securities Corp does not offer tax or legal advice.  Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor 3416 North Blvd, Alexandria, LA 71301, (318) 448-3201.  The views expressed are not necessarily the opinion of FSC Securities Corporation.