When it comes to collecting Social Security benefits, widows and widowers have quite a few options to consider. While each situation is different, survivor benefits can be paid out to both the widow and the deceased’s children. By making smart decisions, you could collect on your spouse’s record and allow your own benefit to increase to a future date.
If you are a widow/widower with children, you are able to receive a monthly income at any time if you are carrying for the deceased’s child under age 16, or the deceased’s disabled adult child regardless of their age. In addition, if the deceased parent contributed to Social Security, the child is eligible to receive benefits until the age of 18 (19 if they are attending elementary or secondary school full time). This encompasses not only natural children, but also stepchildren, grandchildren and adopted children.
Now as you approach retirement, if you are not eligible for your own Social Security, or your benefit is insignificant, you are can elect your survivor benefit as early as age 60 (50 if you are disabled). Keep in mind that if you elect your survivor benefit before your full retirement age (age 66 – 67); the benefit will be reduced; and if you are working, the benefits could be reduced if your income is above the earnings threshold.
If you are in a situation that you lost your spouse prior to retirement, and you both contributed to Social Security, you can start collecting benefits on her deceased spouse’s record as early as age 60 and delay taking your own benefit to age 70 (the maximum age to elect Social Security) to maximize your own Social Security income.
For example, both you and your spouse worked and contributed to Social Security, and were both entitled to a $2,000 monthly benefit at age 66. When your spouse passed away, you were 60 years old and eligible to receive $1,430 as a survivor benefit. Thus, when you elect your survivor benefit, you allow your own benefit to continue to grow, and if you wait until age 70, your own benefit will increase from $2,000 to $2,640. Then you can switch to your own benefit and increase your monthly Social Security income from $1,430 to $2,640 (1).
Now if you are both receiving Social Security when you spouse dies, you will be entitled to the greater of the two monthly benefits.
If you remarry after age 60, your survivor benefits will not be affected. So, if you are in your late 50’s, you may want to reconsider remarriage until age 60. Chances are you will be entitled to a spousal benefit based upon your new spouse, but that will only be 50% of your new spouse’s benefit; while your survivor benefit is based upon 100% of your deceased spouse’s benefit (2).
In the case of divorce, you could still be eligible for survivor benefits on an ex-spouse if you were married for more than 10 years.
There is always the fear of making the wrong decision, especially when emotional factors can lead individuals to make suboptimal choices. Claiming a widow/widower Social Security benefit is no different, and you should consider all options in order to maximize your long-term retirement income.
To help with making the right decision for your survivor benefits, click here to request an appointment and talk to our CFP™.
1. Please note that this example does not take into account possible cost of living increases
2. Note that you still would be allowed to continue to grow your own benefit under the survivor benefit.
Fee-based planning is offered through Focus on Success, LLC, a Kentucky Registered Investment Advisor. Third party money management is offered through ValMark Advisers, Inc., an SEC Registered Investment Advisor. Securities are offered through ValMark Securities, Inc., member FINRA & SIPC (130 Springside Drive, Suite 300, Akron, Ohio 44333-2431; 1-800-765-5201). Focus on Success, LLC, is a separate entity from ValMark Securities, Inc., and ValMark Advisers, Inc.