Covisum Blog

Advisors often ask us about Social Security’s lump sum payment because they’ve read articles mentioning this option. These articles often use an example like this: someone files and suspends at 66 with the goal of waiting until 70 to build delayed retirement credits of 8% each year but then is diagnosed with a terminal illness at 68. The client could then request a lump sum payment to act as though he were receiving a benefit amount as early as when he first suspended. We’ve heard rumblings about using this as a potential tax strategy, potentially creating a year or two of completely tax-free income. These articles fail to mention the risks and how this option doesn’t always help when trying to maximize Social Security. Before you suggest a lump sum payment, keep these factors in mind:

The June 26th Supreme Court decision that same-sex couples have a constitutional right to marry in all states has significantly impacted the landscape of Social Security claiming decisions. In some cases, the Obergefell v. Hodges decision offers clarity. In others, many questions remain. Here, we’ll address the areas in which your clients might seek advice.