(Yes, this applies to divorced people, too! If you're divorced after a marriage that lasted at least 10 years, and you haven't remarried, you may be entitled to a widow's or widowers' benefit based on your ex's work record when he or she dies even if you didn't qualify for a spousal benefit during your ex's lifetime.)
First, the basic rules. As always, they apply the same way to men and women; but since women typically outlive men, I'm going to keep the syntax simple by talking about widows.
At her full retirement age (FRA) a widow's benefit is 100% of the amount that her late husband or ex-husband would receive at his FRA, or the amount he was receiving when he died.
In other words, if he was getting a reduced benefit when he died because he filed for Social Security before his FRA, that reduced amount is the maximum his widow can get. And he was receiving a bigger benefit because he didn't take Social Security until after his FRA, that's what she'd get.
How soon can the widow get this benefit? At age 60, provided she hasn't remarried. But if she applies for her widow's benefit before reaching her FRA, it will be reduced:
A widow between age 60 and her FRA receives 71.5% to 99% of her husband's benefit. A disabled widow age 50 through 59 receives 71.5% of that benefit. A widow of any age who is caring for a child under 16 receives 75%. And the child is eligible to collect a benefit a little longer: Surviving children who are under age 18 (19, if they're still in high school) or disabled qualify for a 75% benefit. But there is a maximum amount that surviving family members can receive at one time. (See Social Security Survivors' Benefits: A Small But Essential Estate Plan)
All of the above also applies to a surviving divorced spouse who was married at least ten years and didn't remarry.
Clear so far? Okay.
Let's say a widow waits until she's 62 to apply for a Social Security benefit. At that point, she has a choice: She can apply for a (reduced) widow's benefit OR apply for a (reduced) benefit based on her own work record.
If you've been paying close attention, you'll notice that this means you have more flexibility about choosing benefits when your spouse is dead than during his or her lifetime:
If you apply for Social Security when you're under FRA and you have a living spouse, you're automatically deemed to be applying for your own benefit and your spousal benefit at the same time; and you get the larger of the two. But a widow who is under FRA can collect a reduced survivor's benefit based on her late husband's record, and at the same time postpone taking her own benefit so that it keeps growing.
Alternatively, she can decide to take her own reduced benefit at age 62 and postpone taking her widow's benefit until she reaches FRA. The best choice depends on the relative dollar amounts involved.
Okay, let's take some questions!
Q: My husband passed away in 1992, and I was told I couldn't receive any Social Security then. At that time, I was working full-time with a good income. Now, I've been laid-off for the last year and a half and my unemployment insurance is about to run out. I turned 60 this year, and wondered if I can collect on his Social Security now? If so, can I collect on his record now, and then later on, change and collect mine? --SS, via email
A: Yes, and yes. Call Social Security without delay! The number is 800-772-1213.
Q: I am 60 years old and eligible for a survivor's benefit from my late husband. I work two jobs for a total of approximately 50 hours a week. I'm aware that if I make over $1,180 a month, SS will take $1 for every $2 I make. Would it be to my advantage to take my survivor benefit now, or wait until I retire? -- KT, via email
A: The answer depends partly on how much you earn, and partly on how big your own retirement benefit will be.
You can collect a reduced widow's benefit now, and still collect your own unreduced benefit when you reach your full retirement age.
Alternatively, if you can afford to wait until you're 62, you can choose which of these two benefits to take early and which to postpone. If your maximum widow's benefit is a lot bigger than your own benefit would be at your FRA, it may make more sense to delay the widow's benefit.
But whichever benefit you choose, you're right that you'll face an annual earnings cap until you're 66. In 2009, people who are collecting Social Security and under their FRA lose $1 of benefit for every $2 they earn over $14,160.
You should make an appointment at your local Social Security Administration office and find out the relative dollar amounts of your widow's benefit and your own benefit. The SSA staff will run the numbers for you and help you determine which choice is better for you.
Q: I am still working, and have reached full retirement age. My husband died four years ago, and I think I'm entitled to his benefits until I'm ready to collect mine. Depending on who I ask at the SSA, I seem to get a different answer. My benefits will be much greater than his when I'm ready to collect it. However, in this challenging business atmosphere, I would certainly like to collect anything I'm entitled to without jeopardizing my own benefit. --LB, via email
A: You're entitled to collect the maximum widow's benefit now that you've reached your FRA.
And yes, because you're at FRA you now can collect the full amount of that benefit regardless of how much you earn. You won't be jeopardizing your own benefit, which will grow 8% a year for each year you delay taking it between now and when you turn 70.
Please send your questions to Lynn@LynnBrennersFamilyFinance.com. I'm sorry I can't respond personally to every email. Questions are only addressed online.
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