Not for the first time, the Social Security Inspector General issued a report concluding that the Social Security Administration systematically shortchanges widows and widowers. Here’s how it works.
When a spouse dies, a surviving spouse who is younger than age 70 has a choice to file only for a survivor’s benefit now and to later claim the higher of the survivor’s benefit and his or her retirement benefit. Often, the best choice is to take the survivor’s benefit now. Then, at full retirement age or age
70 claim the higher benefit. That gives the retirement benefit time to increase by earning delayed retirement credits. A surviving spouse who is the sole primary beneficiary of an IRA can choose an exception from many of the rules.
But Social Security assumes someone is applying for the higher of the survivor’s benefit and the retirement benefit, unless the applicant specifically says he or she is applying only for the survivor’s
benefit. Social Security representatives, its website and its forms don’t make clear what your choices are.
The result, according to a sample reviewed by the Inspector General, is that a high percentage of widows
and widowers receive a lower lifetime benefit than they could have. Often the difference in benefits is substantial over a lifetime.
Social Security is more complicated than many people realize, and you can’t rely on the Social Security website or its employees to give you accurate information or look out for your best interests. It’s worthwhile to use one of the Social Security calculators that are available, such as www.MaximizeMySocialSecurity.com or www.SocialSecurityAnalyzer.com. Or consult with
a financial planner who knows the ins and outs of Social Security.