What You Need To Know
One of the trickiest—and most critical—Social Security planning strategies applies to widows and widowers who are between the ages of 60 and 70. If this isn’t you, please forward this to someone you know who may find it useful.
If you (I am using one gender here but remember that the rules apply to widowers too) also qualify for Social Security on your own work record, you will be wondering how that fits into the mix. If you are still working, you may wonder
if you’ll be “penalized” for earning too much. If you are thinking about remarrying, you may ask how the remarriage will affect your Survivor Benefit. The most important thing I can say here is that it is crucial to get the proper advice and understand the rules before you make your first appointment with the Social Security Administration (SSA) so you can be prepared for what to expect.
SSA Advice Is Inconsistent and Often Incomplete
I have heard mixed stories of how widows’ cases are handled by SSA. In some cases, the worker provides a comprehensive matrix showing the amount of the Survivor Benefit if claimed at the various ages (60 to full retirement age or Full Retirement Age [FRA]) along with the widow’s own Retirement Benefit if claimed at the various ages (62–70). The matrix is informative if you know how to read it, but the numbers are laid out in a confusing way and in the end it does not suggest a clear strategy.
I’ve also heard of workers encouraging widows to start their Survivor Benefit at age 60, even when that would cause the benefit to be reduced by 28.5% and would not be in their best interests in the long run. I’ve heard of workers telling widows who also qualify for a Retirement Benefit on their own record that they can only get one or the ot your (i.e., the switching strategy that is so beneficial for widows is never mentioned).
I’ve heard several reports of SSA workers telling widows they can’t get Survivor Benefits if they are under FRA and working—rat your than explaining how the earnings test works, they simply say the widow must wait until FRA to start the benefit. And in cases where the Survivor Benefit is higher than the widow’s own Retirement Benefit, I’ve seen it where the worker takes an application for both, locking in a permanent reduction for both benefits and negating any future switching strategies. This is why you must get to the widows early.
What You Need To Know
First, you need to know the rules that pertain to your situation. Not all widow situations are the same. And some rules produce different results when combined or more than one rule applies. Here are some general rules.
- If your husband died during the marriage—or if your ex-spouse to whom you were marriedover 10 years died after the divorce— you become eligible for a Survivor Benefit basedon your former spouse’s earnings record as early as age 60 (50 if disabled).
- Once the spouse has died and the Survivor Benefit is set, the amount the widow willactually receive is based on the age you are when you apply for it; the deceased spouse’sage is not relevant. you will receive the most if you apply for it at your FRA. It does notbuild delayed credits after FRA.
- If you start the Survivor Benefit at age 60 (50 if disabled), the benefit will be reduced to5% of the full amount. To get the full amount, you must apply for it at your fullretirement age. If you apply between the ages of 60 and FRA, the reduction will beprorated.
- If you are receiving a Spousal Benefit when your husband dies, the Spousal Benefit will SSA might automatically convert the Spousal Benefit to a Survivor Benefit. If you areunder FRA you do not have to take a reduced Survivor Benefit. you can tell SSA youwant to wait until FRA to start it. However, you may no longer receive a Spousal Benefit, so this would mean going without that income until you turn FRA.
- To receive a Survivor Benefit or Divorced-Spouse Survivor Benefit, you must beunmarried or, if you have remarried, the remarriage must have taken place after age 60.
- If you also qualify for a Retirement Benefit on your own work record, you may be able totake advantage of both benefits, but at different times.
- If you are under FRA and working, all benefits are subject to the earnings test: $1 inbenefits will be withheld for every $2 earned over the annual threshold, which is$19,560 in 2022. This doesn’t necessarily mean you shouldn’t work or shouldn’t applyfor benefits; more analysis is needed.
You have to stay on top of the process. I need to see all communications you receive from SSA.
How To Apply
The claiming strategy we outline will determine the application process. If you are applying for your own Retirement Benefit, you can do so online. It will be a straight application for Retirement Benefits.
Since you also qualify for Survivor Benefits, you will have to make it clear that you are not applying for the Survivor Benefit at this time. You can make this intention known in the comments section of the online application and also during the follow-up call from Social Security.
If you are first applying for the Survivor Benefit and letting your own benefit grow to age 70, you will need to make an appointment at your local Social Security office to apply for Survivor Benefits. It is not possible to apply for Survivor Benefits online. Furthermore, you will need to tell the worker that you are restricting the scope of your application to the Survivor Benefit.
The Bipartisan Budget Act of 2015 did not change the rules for Survivor Benefits. It is still possible for a widow who is eligible for both Survivor Benefits and Retirement Benefits to file a restricted application in order to receive one benefit while the other benefit grows. The language you should use is, “I do not wish this application to be considered an application for Retirement Benefits on my own earning’s record.” If you get pushback from the worker, call me.
What About the Earnings Test?
All benefits received before FRA are subject to the earnings test, whether Survivor Benefits or Retirement Benefits.
But in the cases we’re talking about here, if a widow fails to take one of the benefits before FRA, you may not ever be able to take advantage of it because you’ll be switching. So, unless all of your benefits would be withheld for the earnings test, you might as well apply and get something.
Tell Your Friends and Family
One of the most satisfying parts of my business is telling our clients about benefits they didn’t know they were entitled to. And it happens a lot, especially when the benefits arise from a marriage that happened early in a client’s life. We have found hundreds of thousands of dollars for clients they didn’t know were available to them.
If you know anyone who has ever been married to someone who has died have them call me. If the spouse died during the marriage, and if she is still unmarried or remarried after age 60, you can get Survivor Benefits based on that first spouse’s record. If they divorced and the ex-spouse died after the divorce, and the marriage lasted at least 10 years and she is unmarried or remarried after age 60, there are options to investigate.
Please help your widowed friends and family before they make an irreversible decision costing them potentially thousands of dollars!
