During the month of May, I presented seminars on Social Security at both the Sterling Heights and Troy public libraries. A topic that I received several questions on was survivor benefits. As with anything having to do with Social Security, there are always nuances and complexities, and with respect to survivor benefits, it is not different.
Survivor benefits are an important aspect of Social Security. At present, about 5 million widows or widowers receive a monthly benefit based upon their deceased spouse’s earnings record. Survivor benefits, if collected at full retirement age or later, are worth 100% of the deceased worker’s benefit, including any delayed retirement credits the worker may have accrued at the time of death.

A widow or widower can receive:

• A spouse’s reduced benefits as early as age 60 or full benefits at full retirement age (see table at the end of this article to determine your full retirement age or FRA).
• Benefits as early as age 50 if he or she is disabled AND their disability started before or within seven years of the death of the spouse.
• Benefits at any age if you take care of the deceased worker’s child who is under age 16 or disabled and receives benefits on the worker’s record.

For purposes of this blog, I am focusing on the first situation listed above as it applies to the broadest audience. The latter two situations I will cover in a subsequent blog.

Keep in mind that if a widow or widower remarries prior to reaching age 60 (age 50 if disabled), they cannot receive benefits as a surviving spouse (based upon the prior deceased spouse’s earnings record) while they are married. If they remarry AFTER age 60, the remarriage will have no impact on their ability to qualify for benefits based upon the prior deceased spouse’s earnings record.
While a widow’s or widower’s spouses benefits can start any time between age 60 and full retirement age as a survivor, if the benefits start at an earlier age, they are reduced a fraction of a percent for each month before the widow or widower’s full retirement age. For instance, if you were born in 1950, your full retirement age is 66. If you start receiving your deceased spouse’s survivor benefit at age 60, your own benefit is reduced by 28.5% so you will only get 71.5% of the monthly survivor benefit.

If a person who is receiving survivor benefits now qualifies for their own Social Security retirement benefit, and their benefit amount is more than their spouses survivor benefit, he or she can switch to their own retirement benefit as early as age 62 or as late as age 70. In other words, if the benefit they are entitled to based upon their own earnings record would be the greater of the two, they could apply for their own benefit starting at age 62 and would receive 75% of their Full Retirement Age (FRA) benefit. However, if they choose to wait to claim their benefit as late as age 70, they could receive 132% of their FRA benefit amount. Here again, the benefit amount you will receive for your own personal benefits will be based on a sliding scale depending on when you claim them between 62 and 70 years of age.

Hypothetically, a widow could receive their survivor benefit starting at age 60 and let their own retirement benefit earn delayed retirement credits until age 70, then switch at age 70 to their higher benefit. Thus, the survivor can maximize the benefits from Social Security over the long-term while still receiving some of their deceased spouses survivor benefit between ages 60 and 70. Here again, this would not be beneficial for everyone and it depends on both your and your deceased spouse’s earnings record as to which strategy would be the best. Furthermore, in the case of applying for Survivor Benefits, the Social Security Administrations recommends that you visit a local office or contact them via phone as they cannot be applied for online.

As you can see, determining when to take your deceased spouse’s survivor benefit can make a big difference in the amount of Social Security benefits you can receive in the long run. Like everything else in financial planning, making the right decision regarding your survivor Social Security benefits will require a thorough analysis of your personal situation. If you have questions regarding Social Security survivor benefits, please email me at scott@bloomassetmanagement.com.