June 8, 2015

Social Security Survivor Benefits

Written by Jason Hiley

Whether you have experienced the loss of a spouse recently or sometime in the past, you may be eligible for a Social Security survivor benefit. As with most Social Security benefits, the amount you will receive depends on a variety of factors including your age, the work history of you and your spouse, and your current marital status.

(Men and women are both eligible for survivor income benefits.  Statistically speaking, women are most often the surviving spouse.  For the sake of simplicity, the surviving spouse will be referred to as “widow.”)

Basic Rules and Requirements

A widow’s eligibility for a Social Security survivor benefit is determined by a few basic requirements. In most cases, you must have been married for longer than nine months.  If you remarry prior to age 60, you cannot receive a benefit as a surviving spouse while married.  However, if you divorce or your current spouse dies, you are again eligible for a survivor benefit.  If you remarry after you reach age 60, you will qualify for a survivor benefit regardless of marital status.  Divorced spouses can also qualify for a survivor benefit, providing they were married longer than ten years.

If a widow meets the above requirements, she is eligible to claim Social Security benefits based on her late husband’s work record.  This is true regardless of whether or not her husband had claimed his own Social Security benefits.  The amount a widow is eligible to receive is determined by her age and her late husband’s Social Security benefit amount.

Surviving spouses are eligible to begin collecting a survivor benefit as early as age 60, though the monthly benefit amount will be at a reduced rate until the surviving spouse reaches full retirement age (FRA-66 for those born between 1943-1954).  Survivor benefits are not eligible for delayed retirement credits (beyond those accumulated by the deceased) – the monthly benefit amount does not increase beyond full retirement age.

Let’s examine the case of Jim and Linda Wilson.  Jim passed away before his FRA, but his monthly Social Security benefit amount at FRA would have been $2,000.   If Linda elects to taker her survivor benefit when she reaches age 60, she will receive $1,430 (2,000 x 71.5%) each month for the rest of her life.  This percentage gradually increases, until, at age 66 (her FRA), she will receive 100% of Jim’s $2,000 benefit.

Surviving  Spouse’s   Age Percentage   ofSurvivor   Benefit Survivor   Monthly Benefit Amount* Cumulative   Lifetime Benefit to Age 92*
60 71.5% $1,430 $549,120
61 76.3% $1,526 $567,672
62 81% $1,620 $583,200
63 85.8% $1,716 $597,168
64 90.5% $1,810 $608,160
65 95.3% $1,906 $617,544
66 100% $2,000 $624,000

*In current dollars

By waiting until FRA, Linda would collect an additional $75,000 in lifetime Social Security benefits.  Unless you feel strongly that you will fall significantly short of your projected life expectancy, you should strongly consider delaying to maximize your benefits.

(In this case, Jim died before he claimed Social Security benefits.  If he already elected Social Security benefits, additional complexities and calculations would apply.)

Benefit Election Strategies

Depending on a widow’s own Social Security worker’s benefit, she may benefit from utilizing one of the following lesser known “claim and switch” strategies in order to maximize her total lifetime Social Security benefit.

Your Own/Survivor:  If a widow’s own Social Security benefit is relatively low compared to the survivor benefit, it may be to her advantage to file a restricted application at age 62 in order to collect a benefit on her own work record.  At FRA, she could then switch over to the larger survivor benefit.  By delaying the claim of the survivor benefit, the total monthly benefit will have increased to 100% of the survivor benefit amount. She will also collect income based on her own work record while she waits until FRA to collect her full survivor benefit.

Survivor/Your Own: Conversely, if the surviving spouse’s Social Security benefit is close to or exceeds the survivor benefit, it may be worthwhile to claim the survivor benefit as early as age 60 and switch to her own benefit at a later date.  This allows the surviving spouse to receive monthly income based on her survivor’s benefit while allowing her own benefit to grow, collecting delayed retirement credits , until age 70.  In order to utilize this strategy, the surviving spouse may need to file a restricted application.

For more details, check out our post  Social Security Switch Strategies for Widows.

Consult a Professional 

Unfortunately, most people make Social Security decisions without consulting a professional.  You may be surprised to learn that the Social Security office is not allowed to give advice on strategies that would help maximize your potential benefit.  An expert in Social Security planning can take into account variables such as your current age, life expectancy, and financial assets in order to help you identify an election planning strategy best suited to maximize your lifetime Social Security benefit.

Don’t miss out on tens if not hundreds of thousands of dollars in lifetime Social Security benefits by making an uninformed decision.  Call or email us today to arrange a time to discuss your unique situation.

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