How Social Security survivors benefits work
Q: My friend’s wife died 12 years ago. He is now 61 and not remarried. Because he had so many expenses during his wife's illness, he is not looking to retire anytime soon. However, I had read that it is possible for a spouse to take their deceased spouse’s Social Security benefits at age 62 and continue to work. Is this true? Does it in any way affect the amount of Social Security my friend will receive when he ultimately retires, presumably at age 69? — Eileen Justino, Mount Vernon, N.Y.
A: So here are the facts about your question, according to William “BJ” Jarrett, a public affairs specialist with the Social Security Administration in Baltimore.
Eligibility for Social Security survivors benefits begins:
- as early as age 60 (reduced);
- age 50 if you are disabled and the disability started before or within seven years of the worker's death; or
- any age if you take care of the deceased worker's child who is under age 16 or is disabled and receives benefits on the worker's record.
If you remarry after you reach age 60 (age 50 if disabled), your remarriage will not affect your eligibility for survivors benefits.
In many cases, a widow or widower can begin receiving one benefit at a reduced rate and then, at full retirement age (FRA), switch to the other benefit at an unreduced rate; however, the person would still be subject to the earnings limit if he/she hasn’t reached full retirement age (FRA).
Here are some online resources that may help:
All that said, what you really need to consider is what your friend needs to know to help him plan the rest of his life, says Kurt Czarnowski, a principal with Czarnowski Consulting in Norfolk, Mass.
And so, what you need to focus on is this:
A widow or widower can begin receiving one benefit at a reduced rate and then, at full retirement age (FRA), switch to the other benefit at an unreduced rate; however, the person would still be subject to the earnings limit if he/she hasn’t reached full retirement age (FRA).
So, here’s what Czarnowski says you should discuss with your friend: "While you are under your full retirement age (FRA) of 66, you are limited in the amount you can earn before it begins to impact your ability to collect monthly Social Security benefits. But, once you reach FRA, this earnings limitation goes away, and you can work and earn as much as you would like and receive full Social Security benefits at the same time.”
At your FRA, if you opt not to collect your own retirement benefit, you will begin to earn Delayed Retirement Credits (DRCs) and your payment amount will be increased by 2/3% per month (8% per year) for as long as you don't collect, but no later than age 70, says Czarnowski. However, there is no equivalent increase in a widower's benefit if you defer collecting it past FRA.
So, if your friend is going to keep working, Czarnowski says a possible strategy for him to consider is to begin collecting a full widower's benefit at FRA, and then at a later date, say 69 or 70, switch over to his own retirement benefit.
If he waits until age 70 to switch, his own benefit will have been growing at 8% per year because he wasn’t collecting it, and his payment amount at age 70 will be 32% higher than it would have been had he started at FRA. And, he would have been collecting a monthly widower's benefit in the meantime, says Czarnowski.
“Of course, this is simply what he can do,” says Czarnowski. “What he should do is ultimately his choice, and will certainly be driven by the actual benefit amounts.”
FYI: Your friend can get a benefit estimate on his own account by going to www.socialsecurity.gov/estimator, but he will need to contact his local Social Security office to obtain a benefit estimate as a widower.
The good news for your friend, says Czarnowski, is that he does have some options, but as long as he intends to continue working, they may not present themselves fully until he reaches his FRA.
Robert Powell is editor of Retirement Weekly, contributes regularly to Paste BN, The Wall Street Journal and MarketWatch. Got questions about money? Email rpowell@allthingsretirement.com .