Social Security Death Benefit

When a fully or currently insured worker dies, a on time lump-sum death benefit of $225 may be paid. The benefit generally must be applied for within two years after the worker dies. The benefit is paid to the surviving spouse who was living in the same household as the deceased worker at the time of the decedent's death. If there is no such surviving spouse, the benefit is paid to the surviving spouse (excluding a divorced spouse) who was not living with the worker, but who is eligible for benefits based on the deceased worker's primary insurance amount (PIA). If there is no surviving spouse, payment may be made to the deceased's parent entitled to benefits. If there is no surviving spouse or parent, the payment is divided among children who are eligible for benefits based on the deceased worker's PIA. The lump sum will not be paid if there is no qualifying surviving spouse or children.

Income sources other than government benefits.

The major sources of retirement income, other than government benefits, are pension plans, individual retirement account (IRAs), annuities, investments and post retirement employment. The planner must identify each potential source of income and determine whether the income will meet the client's retirement needs, goals and objectives. If the income is not sufficient, the client's primary asset, the home, may need to be sold. The planner must also understand the timing and mode of distributions from qualifies plans, IRAs and annuities, as the rules are complex. The planning process should involve an analysis of the income tax consequences of each potential element and should be designed to take full advantage of the favorable income tax provisions available for the older client.