Steve Coker, CFP
Social Security Survivors Benefit
When the unthinkable happens and one spouse dies, Social Security provides a benefit, commonly referred to as the widow’s benefit, to the survivor. Why is the survivor benefit referred to as ‘widow’s’ benefit? Simply put, approximately 80% of the individuals receiving survivor benefits are women. Decisions about how long to work and when to claim Social Security Survivor benefits can have a significant impact on the life of the survivor. If you find yourself in this situation, I do recommend you get advice from a professional to help you sort through the complex rules. However, I believe that it is also important to understand yourself how the benefit works. Here are the basics of the Social Security Survivor’s Benefit.
What is the Social Security Survivor’s benefit?
The Social Security survivor’s benefit is a monthly payment to the surviving spouse, based on the earnings of the deceased spouse. Survivor benefits are different from spousal benefits, which are paid when both spouses are living. The strategies for these two benefits are very different and should not be confused.
Who is eligible?
Any widow or widower married for more than 9 months is eligible to receive survivor benefits based on the Social Security earnings record of a deceased spouse. Survivor benefits from a divorced and deceased spouse are also possible if you have not remarried before the age of 60, but you must have been married for at least 10 years.
How much is the survivor’s benefit?
In the most straightforward example, when the deceased spouse was already receiving benefits, and the surviving spouse is full retirement age, the survivor’s benefit will be 100% of the deceased benefit.
When to file?
Of course, there are many more possibilities other than the ‘straightforward example’. When to file for survivor benefits will depend on many factors and should be considered carefully. Survivor benefits can begin as early as age 60 but will be reduced by approximately 4.75% per year for every year before full retirement age. That means that a widow filing at age 60 with a full retirement age of 66 would receive 71.5% of the full benefit.
In general, if the survivor is less than age 70, it will be best to take the survivor benefit as soon as possible. Often, an effective strategy for the survivor is to file for survivor benefits at age 60 and then delay taking his or her own social security retirement benefit to age 70. This will allow the benefit from the survivor’s own work experience to grow as large as possible, and the survivor will be eligible to switch to the larger benefit at that time.
Why is important to wait?
While it is often best to take survivor’s benefits as soon as possible, that is not the case with retirement benefits! In fact, the survivor’s benefit is one of the biggest reasons we recommend waiting to take Social Security retirement benefits. If you take Social Security at age 62 your benefit will be reduced for your life, and the survivor’s benefit will be reduced for the life of your surviving spouse. Conversely, if you wait to take your retirement benefit, the survivor’s benefit will also increase, and will continue for the longer of your two lives. A married couple will often benefit greatly if the higher wage earner simply waits to take retirement benefits.
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