Understanding The Basics Of Social Security Benefits For Surviving Spouses

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Understanding The Basics Of Social Security Benefits For Surviving Spouses.

Understanding The Basics Of Social Security Benefits For Surviving Spouses

Survivor benefits play a crucial role in retirement security and providing for families that unexpectedly lost a loved one. The rules can be complex, and in some cases require planning in the context of a surviving spouse’s overall retirement, tax and financial planning needs.

www.forbes.com

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Richard

 

[Teresa]

Have see this info before and I'm still not clear on something. Maybe I'm just not reading it right.

Here's my scenario: I'm a few years older than my husband (cradle-snatcher for sure!). If I elect to get social security at 'first eligible age' rather than my 'full retirement age', does that affect my 'spousal rate' later? I believe it used to be that the lower-wage spouse (me) took social security at first eligible age and then higher-wage spouse waited until full retirement age so that spouse could get full surviving spouse benefits. Now (I think), if the spouse elects to receive 'first eligible age' SS benefits, then the surviving spouse benefit is calculated at the reduced rate even if the higher-wage spouse HAD waited until full retirement age. I think it changed a few years ago because it was a 'no-brainer' about the lower-wage spouse getting social security benefits on their lower benefit as long as possible (signing up at first eligible age).

BTW, I did a spreadsheet on this (assuming reduced benefit for first eligible AND surviving spouse) and it appears that about 20 years pass until you come out even. That's calculating the money you do receive during the years you wouldn't be receiving money while you're waiting for full retirement age. After the 20 years you become 'ahead' (in dollars only - not counting inflation/deflation).

 

[Passepartout]

I took my SS at 62. DW contributed A LOT more, and commenced hers at FRA. Her monthly benefit is roughly twice mine. She told me that I would get hers if I survive her. I smiled and said. "I'll take it, but I WON'T ENJOY IT!"

Jim

 

[VacationForever]

Have see this info before and I'm still not clear on something. Maybe I'm just not reading it right.

Here's my scenario: I'm a few years older than my husband (cradle-snatcher for sure!). If I elect to get social security at 'first eligible age' rather than my 'full retirement age', does that affect my 'spousal rate' later? I believe it used to be that the lower-wage spouse (me) took social security at first eligible age and then higher-wage spouse waited until full retirement age so that spouse could get full surviving spouse benefits. Now (I think), if the spouse elects to receive 'first eligible age' SS benefits, then the surviving spouse benefit is calculated at the reduced rate even if the higher-wage spouse HAD waited until full retirement age. I think it changed a few years ago because it was a 'no-brainer' about the lower-wage spouse getting social security benefits on their lower benefit as long as possible (signing up at first eligible age).

BTW, I did a spreadsheet on this (assuming reduced benefit for first eligible AND surviving spouse) and it appears that about 20 years pass until you come out even. That's calculating the money you do receive during the years you wouldn't be receiving money while you're waiting for full retirement age. After the 20 years you become 'ahead' (in dollars only - not counting inflation/deflation).

If Spouse A takes own SS benefits before A's Full Retirement Age (FRA), then A's spousal benefits, i.e. half of Spouse B's FRA PIA (Primary Insurance Amount) is reduced, even if Spouse B only takes it at or after FRA. However, survivor benefits is not affected as long as Spouse A switches to deceased Spouse B's SS benefits after A reaches FRA.

 

[Grammarhero]

Understanding The Basics Of Social Security Benefits For Surviving Spouses.

Understanding The Basics Of Social Security Benefits For Surviving Spouses

Survivor benefits play a crucial role in retirement security and providing for families that unexpectedly lost a loved one. The rules can be complex, and in some cases require planning in the context of a surviving spouse’s overall retirement, tax and financial planning needs.

www.forbes.com

.


Richard

Thanks for article. Guiding my aunt-in-law through it.

 

[Teresa]

Thanks for the answer VacationForever.

I had to think on this a bit.

For this example I'm going to use $3000 for husband (B) FRA benefit and $1000 for mine (FRA).

I read your answer to say that if I (A) took SS at less than full retirement age (let's say it's at 85% of my FRA for this example) then when my husband (B) waited until his FRA and then took SS, then I would either keep my own social security benefit (85% of MY FRA) OR I can elect to take 85% of the spouse benefit which is 1/2 of his SS.

The math (from my example benefits above: $850 as reduced benefit for me because I elected to start receiving before FRA.

some time from now - $3000 for husband because he waited until FRA. When he 'retires' (i.e. takes social security) at FRA then I can switch to spousal benefit of $1275 (85% of 1/2 his FRA benefit). I would 'lose' my personal benefit to substitute into spouse. Monthly SS = $4275 for both of us.

If he dies before me, I would get $1500 as a survivor.

IF he was to take 'less than 100% (FRA), then his $3000 would be reduced as well as the spousal 1/2. If he started with 90% of FRA, then his monthly would be $2700 (90% of 3000) and my spousal would be $1147.50 (assuming I had started at 85% of my FRA). Monthly SS = $3847.50 for both of us.

If he dies before me, I would get $1350 as a survivor.

Did I get this right?

 

[Karen G]

some time from now - $3000 for husband because he waited until FRA. When he 'retires' (i.e. takes social security) at FRA then I can switch to spousal benefit of $1275 (85% of 1/2 his FRA benefit). I would 'lose' my personal benefit to substitute into spouse. Monthly SS = $4275 for both of us.

If he dies before me, I would get $1500 as a survivor.

IF he was to take 'less than 100% (FRA), then his $3000 would be reduced as well as the spousal 1/2. If he started with 90% of FRA, then his monthly would be $2700 (90% of 3000) and my spousal would be $1147.50 (assuming I had started at 85% of my FRA). Monthly SS = $3847.50 for both of us.

If he dies before me, I would get $1350 as a survivor.

Did I get this right?

I don't think you got it right. If your husband dies before you, you would get whatever he was receiving each month. If he's getting $3000, that's what you'd get after he passed away. But, you wouldn't also get what you were receiving from social security before your spouse died.

Here's what the article said:
The amount received from survivor benefits is based on the earnings of the person who passed away. At full retirement age, the survivor receives 100% of the deceased individual’s benefit they were receiving or their projected benefit at full retirement age. If someone collects benefits before full retirement age, they’ll get between 70-99% of the worker’s basic benefit amount.

You can only receive your benefit or the survivor benefit, though, not both. Let’s say you are 70 years old, and your spouse is 72. Your spouse received $2,000 a month, and you received $1,000 a month. If your spouse passes away, you’re eligible for their $2,000-a-month benefit. You won’t be able to keep both benefits, so your $1,000-a-month benefit will go away. You want to keep the highest of the two benefits.

 

[Teresa]

Thanks Karen!

I get it now. I think (sheesh).

 

[VacationForever]

Thanks for the answer VacationForever.

I had to think on this a bit.

For this example I'm going to use $3000 for husband (B) FRA benefit and $1000 for mine (FRA).

I read your answer to say that if I (A) took SS at less than full retirement age (let's say it's at 85% of my FRA for this example) then when my husband (B) waited until his FRA and then took SS, then I would either keep my own social security benefit (85% of MY FRA) OR I can elect to take 85% of the spouse benefit which is 1/2 of his SS.

The PIA for your husband and if he takes at FRA, half of PIA is $1500. Since you took on your account early and you should switch to spousal amount at his FRA. The spousal amount will be $1500 minus your early drawing reduction of $150. Your amount will show up as $850 plus $500.

The math (from my example benefits above: $850 as reduced benefit for me because I elected to start receiving before FRA.

some time from now - $3000 for husband because he waited until FRA. When he 'retires' (i.e. takes social security) at FRA then I can switch to spousal benefit of $1275 (85% of 1/2 his FRA benefit). I would 'lose' my personal benefit to substitute into spouse. Monthly SS = $4275 for both of us.

Total amount will be $3000 plus $1350, equals $4350.

If he dies before me, I would get $1500 as a survivor.

If he dies, the amount that he should or would be drawing at time of death will become your survivor amount. Let's say he does exactly at FRA, your survivor benefit will be $3000. You no longer get your own amount. Total will be $3000.

IF he was to take 'less than 100% (FRA), then his $3000 would be reduced as well as the spousal 1/2. If he started with 90% of FRA, then his monthly would be $2700 (90% of 3000) and my spousal would be $1147.50 (assuming I had started at 85% of my FRA). Monthly SS = $3847.50 for both of us.
Spousal benefit (yours) is half of your spousal's PIA which does not change regardless of whether he draws early, at FRA or after. Your spousal benefit will be $1500 minus $150, giving $1350 but you must only file for spousal benefits at or after he reaches FRA.

If he dies before me, I would get $1350 as a survivor.

If he dies while drawing $2700, your amount as a survivor is $2700. If he is drawing $3500 at time of death, you get $3500.

Did I get this right?

See my reply within the quote above.

 

[Teresa]

Thanks to VacationForever also! All very helpful!!!!

 

[DebBrown]

Please help me clarify something. If one spouse dies before taking any benefits and the surviving spouse wants to claim full survivor benefits, does that person have to wait until the time the deceased spouse would have been at a certain age? Or does it depend on the age of the surviving spouse? I hope that makes sense.

 

[VacationForever]

Please help me clarify something. If one spouse dies before taking any benefits and the surviving spouse wants to claim full survivor benefits, does that person have to wait until the time the deceased spouse would have been at a certain age? Or does it depend on the age of the surviving spouse? I hope that makes sense.

There are many scenarios... assuming they have been married for more than 9 months and the surviving spouse did not remarry before 60...

If the deceased had not taken any benefits, then the deceased's PIA, aka FRA SS amount, is used to compute surviving spouse benefits.

There is no reduction in the benefit amounts if the survivor has reached FRA. But before then, widow/widower gets somewhere between 71.5% and 99% of what they would otherwise be entitled to. As an example, if a widow takes the benefit at 60, and her husband would have been getting $1,000 a month after reaching his FRA, her benefit would be $715. If she waits until her FRA, she gets $1000 per month.

 

[DebBrown]

There is no reduction in the benefit amounts if the survivor has reached FRA. But before then, widow/widower gets somewhere between 71.5% and 99% of what they would otherwise be entitled to. As an example, if a widow takes the benefit at 60, and her husband would have been getting $1,000 a month after reaching his FRA, her benefit would be $715. If she waits until her FRA, she gets $1000 per month.

So the percentage of the survivor benefit is based on the survivor's age and the benefit maxes out at the FRA amount for the deceased spouse. Thank you!

We are trying to predict our deaths which is definitely morbid and very uncertain.

 

[VacationForever]

So the percentage of the survivor benefit is based on the survivor's age and the benefit maxes out at the FRA amount for the deceased spouse. Thank you!

Yes. Also, COLA continues to apply to the amount even while it is not drawn on.