After learning of what he called a “perturbing” problem with the social security system, a Santa Clarita financial advisor is urging residents to take action to help correct the issue both for today’s seniors and their own future.

Under the current system, the entire month’s worth of social security dollars is rescinded — or taken back — when the recipient passes away, even if the death occurs at the very end of the month, according to Arif Halaby, a Certified Estate Planner.

Paula shares her story on KHTS AM-1220.

“This is important for you to know if you’re trying to build a plan where social security is a big part of your retirement,” Halaby said. “Even though somebody was alive most of that month, nearly all of that month, 99 percent of that month, it doesn’t matter… I’m a little bit perturbed about this, if you will. I’m not a fan of it.”

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Halaby learned of this startling policy when the mother of his longtime client, Paula, passed away in March after suffering from Alzheimer’s disease for seven years.

Paula’s mother was receiving $1,230 automatically deposited into her account on the 3rd of every month. When she died on the 28th, Paula claims she was not contacted by social security officials about what this meant for the month’s payment, which had already been received weeks prior.

“Just before her (funeral) services, I went to the bank to withdraw money for the organist and the few things we needed there, and there was no money,” Paula said. “They had rescinded the payment, had not contacted us at all, and in the meantime we had bounced some payments.”

While Paula’s mother had been alive for the majority of the month and had acquired expenses like rent, food, utilities, etc., the current system allowed social security officials to take back what had already been paid to her to cover that month’s bills.

“Even if she had died at a quarter to midnight on the last day of the month, there was no compensation, there was no pro-rating, there was nothing,” Paula said. “It was gone. We had paid her bills, and now they were all bouncing.”

In addition to sharing Paula’s story, Halaby is encouraging Santa Clarita residents and beyond to write to their elected officials calling for what he called a “common sense” reform of the system.

“This is the time to get out there and make sure that they understand, to hear your voice about this being an issue,” Halaby said. “That’s the only way it’s going to be solved.”

Total Financial Solutions offers assistance with preparing for retirement and financial planning in Santa Clarita and the surrounding valleys. Santa Clarita financial advisor Arif M. Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners from Santa Clarita financial planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344