Lighthouse Financial Advisory

The most devastating financial shock a surviving spouse faces isn't the funeral costs. It’s the sudden disappearance of a Social Security check they were counting on. 🛑

In 2026, the rules around Survivor Benefits are specific, and timing is everything. If you don't have a plan for the "Higher-Of" transition, you could be leaving thousands of dollars on the table. 💸

Here is the essential breakdown:

⚠️ The Golden Rule: You do NOT keep both checks. You keep the larger of the two, and the smaller one vanishes.

⏳ Timing Matters: Claiming at age 60 vs. your Full Retirement Age (FRA) can be the difference between receiving 71.5% or 100% of the benefit.

🔄 The "Switch" Play: If you have your own work record, you might be able to claim a survivor benefit early while letting your own retirement check grow by 8% per year until age 70.

Don't let a lack of transparency derail your financial security. Knowledge is the best hedge against uncertainty.

Check out the hand-drawn guide below for the critical numbers you need to know. 👇

Many clients find themselves in a financial pickle. “Should I cash out funds from a QDRO or should I roll it into my own IRA?”. The answer to this truly depends on your specific financial situation.

There is no one size fits all retirement strategy, I’d be more than happy to help you take a look at your options and come up with a strategy that fits your needs!

What Is a Qualified Domestic Relations Order (QDRO)?

What Is a Qualified Domestic Relations Order (QDRO)? In a divorce, a qualified domestic relations order (QDRO) requires that a portion of retirement account assets be paid to a former spouse to ensure a fair split.

Thinking about a Roth IRA conversion this year, but not sure if it makes sense?

Here are a few key points to keep in mind ✅

What a Roth conversion is:
🔹 Moving money from a pre-tax account, such as a traditional IRA, into a Roth IRA
🔹 The amount converted is typically taxable as ordinary income in the year of conversion

Why investors consider it:
🔹 May allow for tax-free growth and tax-free qualified withdrawals in retirement if certain requirements are met
🔹 Currently, there are no required minimum distributions for the original Roth owner under existing law
🔹 May provide more flexibility for heirs than a traditional IRA, depending on individual circumstances

How to potentially approach it:
🔹 Consider smaller, multi-year conversions instead of one large move
🔹 Monitor how added income may affect Adjusted Gross Income, tax brackets, and future Medicare premiums
🔹 Once converted, it generally cannot be reversed under current rules

Key considerations:
🔹 With a Roth IRA, to qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances.
🔹 With a traditional IRA, once you turn 73, you must take the required minimum distribution. Withdrawals are taxed as ordinary income and may be subject to a 10 percent federal income tax penalty if taken before age 59½.

Roth conversions may be a useful strategy when they align with an overall, personalized tax and retirement strategy. As always, consult a tax and financial professional before making any decisions.

A quick tip for my service members:

Combat pay isn’t taxed by the IRS.

If you can contribute that income into a Roth IRA, you’re essentially putting in tax-free dollars, letting them grow tax-free, and withdrawing them in retirement tax-free.

No tax going in.
No tax while it grows.
No tax coming out in retirement.

Thank you all for your service!