Offering Social Security Strategies for Widows and Widowers

Social Security survivor’s benefits are one of the most important parts of retirement planning. Often, a married couple is living comfortably when both are alive and receiving Social Security retirement benefits. When one spouse passes away, however, one of the retirement benefit checks stops.

Social Security pays survivor’s benefits. But the surviving spouse can receive only one check and chooses which benefit to receive. Making the optimum choice is key, because the loss of one Social Security check often is a financial burden to the surviving spouse.

The rules are simple. The surviving spouse can choose either to continue his or her own earned retirement benefits or can switch to the survivor’s benefit. The survivor’s benefit is whatever benefit the deceased spouse was receiving. If the deceased spouse wasn’t yet receiving retirement benefits, the survivor can receive what the deceased would have been entitled to at normal retirement age. An important point is that your own retirement benefits increase by delaying them until age 70, but a survivor’s benefit doesn’t increase after the survivor reaches normal retirement age.

The best choice depends on the surviving spouse’s age and life expectancy and the retirement benefits of each spouse.

When the surviving spouse is age 70 or older, the answer is simple: Take the higher of the two benefits.

When the survivor is younger, the solution might be different. We’ll look at a few examples from an article in The Journal of Retirement by William Reichenstein and William Meyer.

Suppose a widow is age 66 and hasn’t begun her retirement benefits. Her late husband was a little older and had begun his retirement benefits at full retirement age. The widow is entitled to $2,000 per month in retirement benefits now; the husband was receiving $2,200 monthly. The smart move for the widow is to begin taking the survivor’s benefit now. At age 70, her earned benefit will have increased to $2,640 per month. She can switch to that benefit and significantly increase her monthly income for the rest of her life.

Now, suppose the husband was receiving benefits of only $1,500 monthly when he passed away, and everything else is the same. If the widow begins taking survivor’s benefits and switches to her earned benefit at age 70, she ends up with higher lifetime income if she lives to at least age 73 and two months. Her alternative is to begin taking her earned retirement benefits at age 66.

There are a couple of other points to keep in mind.

Survivor’s benefits can begin as early as age 60, but will be reduced if they begin before full retirement age just as a retirement benefit would be. But, as mentioned earlier, the survivor’s benefit doesn’t increase by waiting until age 70. The maximum survivor’s benefit is the one due at the survivor’s full retirement age.

Also, the earnings limitation applies to survivor’s benefits taken before full retirement age just as it does to retirement benefits. That means anyone younger than full retirement age who earns more than $16,920 in 2017 will lose $1 of benefits for every $2 of income earned over the limit. In the year a person reaches full retirement age, one dollar of benefits is lost for every $3 earned above the limit of $44,880 in 2017. After reaching full retirement age, there is no earnings limit. The earnings limit means a widow or widower who is younger than full retirement age and still working could have the survivor’s benefit reduced or even eliminated.

Finally, you might be able to receive survivor’s benefits based on the earnings record of an ex-spouse who has passed away. You’re eligible for the benefits if the two of you were married at least 10 years and you did not remarry before age 60. If you remarry after turning 60, you can claim survivor’s benefits based on an ex-spouse’s earnings record. When you qualify, you are eligible for the same benefits as a surviving spouse of your deceased ex-spouse. Your benefits are not reduced if there is a surviving spouse or another surviving ex-spouse also receiving benefits on your deceased ex-spouse’s record.