Ask Rusty – Maximizing Widow’s Benefits

Dear Rusty:  I am 64 years old, born in October of 1952, and in rapidly declining health.  I took my Social Security early, as soon as I was 62, and now get $1838 per month in Social Security benefits (before Medicare premiums are taken out).  My wife of many years also took her Social Security at age 62 and she gets $787 a month.  From what I understand, when I pass away she will get my full benefit instead of what she gets now.  I’m hoping that’s true because she won’t be able to make it with only $787 a month.
Signed:  Planning for her.

Dear Planning:  First, you’re to be commended for planning ahead for that time when your wife will be left without you.  Dealing with such a loss is devastating enough without adding a severe loss of income into the mix.  Let me quickly put your mind at ease – once she reaches her full retirement age, your surviving spouse will get at least as much as your benefit amount, currently $1838 per month.  This is known as her survivor’s, or widow’s benefit.

However, if she takes her widow’s benefit before her full retirement age it will be reduced somewhat, depending upon her age when she applies. The following assumes your wife will have reached her full retirement age when you pass.

Normally, the Widow’s Benefit equals the benefit amount that the deceased spouse was receiving, meaning your wife would get the same amount you were receiving when you died – in this case $1838 per month.  There is, however, a somewhat obscure exception, which may apply here.  The exception I’m speaking of is a Social Security rule, which applies when the deceased spouse, claimed benefits before full retirement age and the surviving spouse is eligible for widow’s benefits.  The surviving spouse has the option of either keeping their own benefit or claiming the widow(er)’s benefit, and in this case your wife would obviously claim the widow’s benefit because it’s higher than her own.  But (and this is a big but) because you claimed your Social Security benefit early, your widow is entitled to either of the following, whichever is more:
  • The amount of benefit you (the deceased spouse) were receiving at your death, or,
  • 82.5% of what your benefit would have been had you (the deceased spouse) waited until your full retirement age to start your Social Security benefits.
Using the numbers you gave me as an example, since your current benefit amount is $1838/month, taking out COLA increases granted since you applied means your original early retirement benefit was about $1780.  That means that your benefit amount at your full retirement age of 66 (known as your Primary Insurance Amount, or “PIA”) would have been about $2374.  Adding past COLA increases onto your PIA brings your PIA amount up to $2458.  Using the above 82.5% exception rule, your wife would be entitled to $2027 per month (82.5% of $2458), instead of the $1838 you are now receiving.  And that extra $189 per month will, I’m sure, be important to her after you’re gone.  Any future COLA increases will add to both the early retirement benefit you receive while living and your full retirement age PIA amount, and your surviving widow will get the higher benefit amount at your passing. Note that your wife should not wait past her full retirement age to apply for survivor’s benefits, as they do not earn delayed retirement credits.
The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at info@amacfoundation.org.
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