Spousal vs Survivor Social Security Benefits

With more than 200 ways to claim Social Security benefits, discovering what’s best for you can be a challenge. And for two benefits, in particular, there has been a lot of confusion—spousal benefits and survivor benefits. In fact, an internal audit of the Social Security Administration found that 82% of SSA representatives were giving incorrect information about these two benefits and it cost recipients more than $131 million dollars they were entitled to. So, it’s important you understand these two benefits and some strategies for using them.

According to the Social Security Administration, when a worker files for retirement benefits, the worker’s spouse may be eligible for a benefit based on the worker’s earnings… the spouse must be at least age 62… The spousal benefit can be as much as half of the worker’s “primary insurance amount,” depending on the spouse’s age at retirement. If the spouse begins receiving benefits before “normal (or full) retirement age,” the spouse will receive a reduced benefit.

Example. At John’s full retirement age his Social Security benefit is $2000 a month. Mary has been a homemaker all their married life, and except for some jobs during high school and college, she contributed very little to Social Security. If she chooses to file for the spousal benefit when she reaches full retirement age, she will receive one-thousand dollars a month or 50% of John’s Social Security. Mary’s benefit, based on her own work history is $400 a month, so the spousal benefit is the best option. If Mary chooses to receive the spousal benefit between her age 62 and full retirement age, she will receive a reduced benefit.

A survivor benefit is receiving a Social Security check based on what a deceased spouse was eligible for at the time of their death. If you wait until YOUR full retirement age to collect the survivor benefit, you’ll receive 100% of that amount. You can receive benefits as early as age 60, but you’ll get less money.

Example. If John dies, Mary is eligible to file for the survivor’s benefit. If John was receiving $2000 a month at the time of his death, and Mary is full retirement age, she will receive $2000 a month. If Mary had been receiving the 50% spousal benefit when John dies, the bigger benefit continues and the smaller benefit goes away.

You can never receive Spousal Benefits and Survivor benefits at the same time but you may be able to collect on both of them at different times. Here are some potential strategies that may help maximize your Social Security retirement income:

  1. If a widow or widower has not collected any Social Security benefits at the time of their spouse’s death, the survivor can wait until he or she reaches their full retirement age to claim the maximum survivor benefit. If that person is also entitled to their own retirement benefit, they may be able to collect one benefit first and then switch to the other benefit later if switching would result in a larger benefit.

For example, a person entitled to a substantial retirement benefit on their own earnings record as well as a survivor benefit, may want to collect the full survivor benefit at their full retirement age, allow their own retirement benefit to grow by 8% each year between FRA and age 70 because of delayed credits, and then switch to their own benefit if it’s larger.

  1. Rather than waiting to full retirement age to collect the full survivor benefit, you may choose to take a reduce survivor benefit, since you can collect it as early as age 60, let your own retirement benefit grow to age 70, and then switch to the larger benefit. This leverages your total Social Security income as early as possible.
  2. But if the survivor benefit would be larger than their own retirement benefit at full retirement age, the surviving spouse may want to file for their own retirement benefit before FRA, even though it would be a reduced payout, and then switch to the higher, full survivor benefit when they reach FRA. Even though the retirement benefit would be permanently reduced because it was taken before full retirement age, it has absolutely no impact on the survivor benefit if the widow or widower waits until full retirement age to collect it.

If a widow or widower is already collecting Social Security at the time of their spouse’s death, and some or all of the benefit is based on the spouse’s work history, the spousal benefit will automatically be converted to a survivor benefit at the time of the spouse’s death.

Always remember, you can never receive spousal benefits and survivor benefits at the same time, but you may have the option to switch from one to the other. Always ask yourself, how can I maximize my income from Social Security?

As you and your spouse consider your Social Security strategy it’s worth considering one more thing. Should the one who will receive the largest Social Security check wait until age 70 to claim benefits?

Each year you wait to collect Social Security, from full retirement age to age 70, your Social Security benefit increases by 8% per year because of delayed credits. In other words, Social Security rewards you with a bigger check because you wait to claim your benefit. Someone claiming a spousal benefit is not entitled to delayed credits. But a person waiting to claim their own Social Security at age 70 is entitled to them. Therefore, by delaying a claim for Social Security benefits until age 70, the spouse with the maximum benefits is potentially increasing the future survivor benefit for the remaining spouse. And if the spouse with the maximum benefits continues working to age 70 and files for their Social Security benefits at age 70, it’s one more way of creating the largest survivor benefit possible.

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