Widows and Widowers have options not offered to others. You can file for so-called survivor benefits any time after age 60 (age 50 if disabled). These monthly benefits will be based on the deceased individual’s full retirement age (FRA) benefit and your age when you begin to receive benefits. You can choose between survivor benefits and your own benefit when you are ready to file. You can switch to the benefit you didn’t originally take at any time.
If you remarry before age 60 (50 If you are disabled), you will not qualify for a survivor benefit. However, if you remarry after age 60 (50 if you are disabled), you may be eligible to receive a survivor benefit based on your former spouse’s earnings record. Eligible children (18 and under or disabled) can also receive a survivor benefit, worth up to 75% of the deceased’s benefit.
As you will read in this chapter, it is important to calculate all possible scenarios to make a decision that is best for your own situation. Consider your health, family medical history, and your financial health in making your decision. If you have a financial advisor you may want to seek their advice before making your decision.
Once again, Social Security can provide a good foundation to your complete retirement income picture. You can take benefits in such a way as to maximize your Social Security benefit once you reach FRA or age 70. If you elect to begin receiving Social Security benefits before your FRA (whether it is the widows/widowers benefit or your own benefit) your benefit will be reduced.
The reductions for receiving your own benefits early are similar to the individual reductions discussed in Chapter 2. The difference with widows/widowers is the additional death benefits from their spouse, which is dependent on when or if they received benefits before passing away. To keep things consistent, I will cover all scenarios from the beginning.
Individual Benefits
If you elect to begin receiving your Social Security benefits within 36 months of FRA the monthly payment will be reduced 5/9 of 1% (0.56%) for each of those months. This number is known as the reduction factor. If you elect to begin receiving your Social Security benefits when there are more than 36 months before FRA the monthly payment will be reduced 20% for the first 36 months plus 5/12 of 1% (0.41%) for each month in excess of 36.
There is an easy way to calculate how reduction factors will affect your monthly benefits. You can use a formula that allows you to enter reductions in terms of months (as opposed to the percentages) to simplify the formula. Let me show you how this works.
If the reduction factor (number of months prior to FRA) is 1 through 36, subtract 180 by the reduction factor and then multiply it by the FRA benefit amount. Then divide that total by 180. This will equal your monthly benefit amount.
Example: 36 months or less before FRA
Say your FRA is age 66 and your benefit is $1500 and you begin to receive Social Security benefits at age 63. The reduction factor (number of months prior to FRA) is then 36. To calculate your monthly benefit you would use the formula below:
180 – 36 = 144
144 x $1500 = 216000
216000 / 180 = $1200
Your monthly benefit at age 63 would be $1200.
If the reduction factor (number of months prior to FRA) is more than 36 your Social Security benefits will be determined using a different formula. Subtract 192 by the number of months in excess of 36 and multiply it times the FRA benefit amount. Then divide that total by 240. This will equal your monthly benefit amount.
Example: 37 months or more before FRA
If your FRA is age 66 and your benefit is $1500 and you begin to receive Social Security benefits at age 62, your reduction factor will be 47 (see the note below). To calculate your monthly benefit, you would use the formula below:
192 – 11 = 181
181 x $1500 = 271500
271500 divided by 240 = $1131
Your monthly benefit at age 62 would be $1131.
Note – Benefits are not payable for any month before you are age 62 for the entire month.
Widows/Widowers Benefits
Even if you file for early benefits yourself, you can still wait to file for survivor benefits at FRA with no reduction. If your deceased spouse did not receive a reduced retirement benefit you will be entitled to 100% of the deceased spouse’s benefit plus any applicable delayed retirement credits. If your deceased spouse was receiving reduced retirement benefits you will be entitled to the higher of what he/she would be receiving if he/she were still alive or 82.5% of his/her FRA amount.
If you take survivor benefits first AND before your FRA AND your deceased spouse did not take benefits before their FRA, your benefits will be reduced from your deceased spouses FRA amount including any entitlement to delayed retirement credits.
If your deceased spouse took his/her benefits before FRA, then your survivor benefit will be reduced using the following formula:
1. Widows/widowers benefit based on the higher of the deceased’s death benefit at FRA or fictitious life benefit at FRA with any applicable delayed retirement credits using the applicable fraction;
2. 82 1/2 % of the deceased spouses’ death benefit at FRA;
3. Determine the deceased spouse’s death benefit as if now alive.
4. Arrange the results obtained in 1, 2, and 3 in order from the lowest amount to the highest amount and identify each by type.
5. Locate the sequence of results obtained in step 4 on the following chart. The benefit payable is underlined.
NOTE: Bring all FRA amounts up to effective date of widows/widowers entitlement using any applicable cost of living adjustments.
Determine the deceased workers FRA benefit at the time of his death. You then have to determine what your benefits will be by reducing the benefit based on your age, what the benefits would be based on 82.5% of the FRA benefit and the amount of benefit the deceased individual was receiving at the time of his/her death.
Put those 3 figures in the boxes below by putting the lowest of the 3 amounts in column 1, the middle amount in column 2 and the highest of the 3 amounts in column 3. Based on how the amounts work out in lowest to highest order determines which sequence you will use to determine your monthly benefit amount. Depending on which sequence you fall, the underlined amount is what you will receive.
* You may need to call 1-800-772-1213 or go into the local Social Security office for this information. If you never received any benefits from your deceased spouse’s record you will have to go into the Social Security office with a copy of the death certificate to prove you are the surviving spouse. If you are a surviving divorced spouse you will need your divorce decree and if the divorce decree does not show the date of marriage, you will need your marriage certificate.
A method of computing a reduced widow/widower benefit requires the use of the total possible reduction factor (RF) based on your date of birth. That number will vary from 60 to 84. That method is:
(FRA or Unreduced Benefit) x RF x .285 / Total possible RF for claimant’s date of birth
= Reduction Amount
Round the result up to the next dime. The result is the amount of reduction. Subtract the Reduction Amount from the FRA or Unreduced Benefit for the amount payable.
EXAMPLE: A widow born on 08/31/1959 is entitled beginning 08/2019. Her Full Benefit Age (FBA) is age 66, 6 months. Her RF is 78 while the total possible RF is 78. The Unreduced Benefit is $2094.
Using the above formula:
$2094 x 72 x .285 / 72 = $596.79 rounded up = 596.80
$2094 – 596.80 = $1497.20 reduced to the next full dollar amount or $1497.00 payable.
Another way to estimate survivor benefits is by comparing the charts and examples on the Social Security website at: http://www.ssa.gov/survivorplan/survivorchartred.htm
Benefits Options for Widows
The basic options available to widows/widowers are:
Age 60 – Receive widows/widowers benefits only AND:
Stay on widows/widowers benefits.
Switch to own benefit at Age 62.
Switch to own benefit at FRA.
Switch to own benefit at Age 70 and receive applicable delayed retirement credits.
Age 62 – File for own benefit only AND:
Switch to widows/widowers benefit at FRA.
If you take benefits between age 60 and 62 you will receive a reduction in your benefit over FRA. Earnings in excess of $17,640 will affect monthly benefits. Social Security will deduct $1 in benefits for every $2 you earn over $17,640. These figures increase in the year you reach FRA to $41,880 for only those months before the month you reach FRA and $1 of benefits are deducted for every $3 you go over the $46,920.
If you delay your own benefits past FRA you will receive a 2/3 of 1% for each month you delay benefits which equals 8% per year. You will receive a 32% increase in monthly benefits over FRA if you wait until age 70.
Examples
The following is an example of monthly benefits and what you might expect to receive over your lifetime in Social Security benefits. The following assumptions were made:
Deceased Individuals Date of Birth: 12/28/1952
FRA Benefit: $2094
Widow/widowers Date of Birth: 08/31/1959
Own FRA Benefit: $1252
Expected Death Age of surviving spouse: 87.04 years
No cost of living increases were included
Option 1:
Surviving spouse files for widows’ benefits ($1497 per month) at age 60 and stays on that benefit until age 70 ($1,569 per month). Total lifetime benefit $505,992. There is no reason for the surviving spouse to switch to own benefit at either age 62 or FRA as these benefits are less than the widow’s benefit.
Option 2:
Surviving spouse takes own benefit ($892) at age 62, 1 month and switches to widows’ benefits ($2094) at FBA. Total lifetime benefit $570,776.
The last option is the one that will pay the surviving spouse the most amount of money over her lifetime. This is just one piece of the puzzle to consider as outlined above when deciding when to file and what benefits to take.