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survivors benefits

Q&A: Social Security survivor’s benefit

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Dear Liz: My husband will retire next spring but has wisely decided to not collect Social Security until he is 70. I have been retired for several years and have been collecting my Social Security benefits, which are significantly less than what his will be because he was the higher wage earner. Should he die before age 70, would I still be able to claim, as his surviving spouse, his larger benefit, even though he would not have started collecting it yet? The information I read only talks in terms of the higher wage earner already collecting Social Security benefits before his or her demise.

Answer: Even if your husband dies before starting Social Security, you can collect the larger benefit he’s earned, including any delayed retirement credits from putting off his application.

Those delayed retirement credits increase his benefit, and yours as the surviving spouse, by 8% each year between his full retirement age of 66 and age 70. That can make a huge difference in the quality of life of the surviving spouse, who has to get by on a single check after the other partner dies.

Q&A: Why surviving spouses aren’t always entitled to Social Security benefits

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Dear Liz: I am confused. I thought all wives were entitled to Social Security if the husband’s earnings qualified. My husband is deceased and he received a larger Social Security benefit than I because he worked longer in a qualified system. We were married almost 49 years. Most of my earnings are from a job that didn’t pay into Social Security. I was told because I had a high retirement income, I could not qualify for a percentage of my husband’s benefit. I didn’t know there was an income basis for Social Security. My income was severely reduced when he died. I appreciate any resource in understanding Social Security you could provide.

Answer: It sounds like your survivor’s benefits were eliminated by something known as the “government pension offset,” or GPO. While this sounds draconian, the GPO is actually meant to ensure that people in your situation don’t wind up getting a bigger benefit than people who paid into the Social Security system.

If you had paid into Social Security, you would get the larger of either your own benefit or your husband’s after his death. You wouldn’t be able to continue receiving both checks. Since you’re receiving a government pension from outside the Social Security system, you would be receiving much more than a typical survivor if you could keep that pension AND get your husband’s check. The GPO reduces your survivor benefit by two-thirds of your government pension to compensate. If your pension is big enough to completely eliminate your survivor’s benefit, that means you’re still better off than you would have been just receiving your husband’s check.

Q&A: Divorced survivor benefits

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Dear Liz: After death, do ex-spousal Social Security benefits continue?

Answer: Any checks you’re getting from Social Security are supposed to stop when you die. But you’re probably asking what happens after the death of your ex-spouse.

The good news is that you would be eligible for divorced survivor benefits. Instead of receiving a check based on half of what your ex was getting, your payment will be based on the entire check your ex was getting. (With either benefit, the check would be reduced if you started benefits before your own full retirement age.)

Benefits for divorced spouses are available if the marriage lasted at least 10 years. Divorced spousal benefits end if the person remarries, but divorced survivor benefits can continue if the survivor remarries after reaching age 60.

Q&A: Social Security survivor’s benefits

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Dear Liz: I became a widow in my 40s. My children collected Social Security until reaching age 18. At age 60, I started collecting survivor’s benefits. Now that I’m 65, do I need to do anything to collect my late husband’s full Social Security amount at age 66?

Answer: Starting early means you won’t get his full Social Security benefit.

Survivor’s benefits are based on what your husband would have received at his full retirement age if he hadn’t started benefits when he died, or what he actually received if he had started benefits.

His benefit was reduced to reflect your early start, however. Only by starting at your own full retirement age of 66 would you have received 100% of his benefit.

Starting early with survivor’s benefits can be a good option if you had a solid work history and your own benefit eventually will be larger than the survivor’s benefit. If that’s the case, you can leave your own benefit to grow until it maxes out at age 70 while still receiving Social Security checks. If your own benefit won’t be larger, though, it may have been smarter to wait.

Q&A: Social Security survivor’s benefits

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Dear Liz: I am 64 and have been divorced over 22 years. My former husband passed away two years ago at the age of 62. Our marriage lasted more than 10 years and neither of us remarried. I went to the local Social Security office after he passed away, but the official there said I was not entitled to any claim for benefits on my ex’s work record. From what I have been reading, that may not be true. Are you able to clarify this for me? I am not able to get any firm answers, even from my financial advisor. My ex worked for a private employer his whole career, so he would have paid into Social Security. I recently lost my job, so the money would be helpful.

Answer: You qualified for benefits — but what the official may have meant was that you wouldn’t receive anything.

If you were still working at the time you inquired, any Social Security check would have been reduced by $1 for every $2 you earned over a certain amount ($15,120 in 2013). In other words, your benefit could have been wiped out had you earned enough. The earnings test ends at full retirement age (currently 66).

Survivor’s benefits are based on the amount that the deceased worker had been receiving if he’d started benefits or, if he hadn’t, what he would have received at full retirement age. The amount is reduced if survivors start benefits before their own full retirement age.

These benefits are available to both current and divorced spouses starting at age 60, or 50 if they’re disabled, or at any age if they’re caring for a child under 16 who is getting benefits based on the former spouse’s work record. To qualify for divorced survivor’s benefits, the marriage must have lasted 10 years. Your ex’s remarriage would not have affected this benefit. Neither would your own, since you were over 60 when he died.

Survivor’s benefits have more flexibility than spousal benefits or divorced spousal benefits, which are typically about half what the worker receives. You can switch from survivor’s benefits to your own retirement check, or vice versa, even if you start early. With spousal benefits, an early start typically locks you into a permanently reduced check.

You can start survivor’s benefits now or you can start your own benefit and switch to the survivor’s benefit at 66, if that would be larger, said economist Laurence Kotlikoff, who runs the claiming strategy site MaximizeMySocialSecurity.com.

You also need a new financial advisor — one who can be bothered to answer your questions. People who are retirement age should find advisors who are willing to put clients’ needs first and to educate themselves about Social Security claiming strategies.

Survivor benefits: what you can expect

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Dear Liz: Two years ago, I elected to start my Social Security benefits early, at age 62. My current benefit is $1,350 per month. My spouse, currently working, will be turning 62 next year and is also planning to take an early retirement benefit because of health issues. Her benefit is expected to be slightly more than my benefit at that time. If she dies before me, what can I expect to collect from Social Security as the spouse of someone who started benefits early?

Answer: If your wife dies before she begins receiving Social Security, your survivor’s benefit would be based on what’s known as her “primary insurance amount.” That’s the amount she would receive at full retirement age (which is 66 for those born between 1943 and 1954; after that, full retirement age increases gradually to age 67 for those born in 1960 or later).

Once she begins benefits, though, your survivor’s benefit is based on what she’s actually getting. So if she receives a reduced benefit, your survivor’s benefit is reduced as well. It would be further reduced if you, as a widower, begin taking survivor’s benefits before your own full retirement age.

You would not be able to get your own benefit plus a survivor’s benefit if your wife should die, by the way. You would get the larger of the two, but not both.