On Social Security Survivor benefits

I am now 80 and my wife is 76, and we both took early Social Security benefits at age 62.

When my wife took her Social Security, it was a lot smaller than mine, so they took a portion of mine and added it to hers. How does that work? Also, when I die, will my wife get all of mine or just a percentage?

Signed: Curious Senior

Dear Curious: Social Security’s standard process is to pay a beneficiary’s personally earned retirement benefit first, and then add an additional amount as necessary to bring the payment up to what they are entitled to as a spouse, or as a surviving spouse. So, in your wife’s case, she is now (while you are both living) receiving her own earned Social Security benefit plus a “spousal boost” to make her payment equal what she’s due as your spouse. Your wife’s spousal boost was not taken from your benefit payment – you still get your own retirement benefit – but her spousal boost amount was computed by comparing the amount she was entitled to at her full retirement age (FRA) to 50% of your FRA benefit amount and then reducing her spousal boost amount because she claimed at age 62 (all Social Security benefits, except disability benefits, taken before FRA are reduced).

Regarding your wife’s benefit as your survivor, since her own SS retirement benefit is smaller, if you die first the added “spousal boost” amount your wife now gets will stop and be replaced by a higher supplement which brings her total payment up to what she is entitled to as your surviving widow.

As your spouse while you are still living, the most your wife could have gotten was 50% of the benefit amount you were entitled to at your full retirement age (FRA) of

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‘Social Security Matters’ By Rusty Gloor ASK RUSTY (cont.)

66, but she gets less than that because she claimed at age 62. However, if you die, your wife will get a higher total amount consisting of her personally earned age 62 benefit, plus a supplemental amount to make her payment equal to 100% of the amount you were receiving when you died. In fact, her benefit amount at your death may even be more than you were getting when you died, because she will get at least 82.5% of your “primary insurance amount” or “PIA”, which is the benefit you were due at age 66 (your FRA).

Think of it this way – as your surviving spouse your wife’s total benefit payment amount will be either 100% of the benefit you were receiving when you died, or 82.5% of the benefit you were entitled to at age 66, whichever amount is higher. And that will replace the smaller amount your wife is now getting as your spouse while you are both living. Of course, your wife will need to notify Social Security of your death and should do so in a timely manner to get the higher benefit she is entitled to as your surviving spouse flowing as soon as possible.

Social Security is confusing in itself and gets even more confusing when you receive multiple answers to the same question from multiple sources. During my research I came across your organization, and I hope you can assist me in making educated choices regarding my Social Security benefits.

My husband of 20+ years passed away in 1998 and I have not remarried. I will be turning 65 next month (born in 1957), and my full retirement age is 66 years and 6 months. I work fulltime, have not made any specific retirement plans, and my current gross salary is over $60,000. So, my questions are: Can I collect any of my late husband’s social security? If yes, when, and how? Signed:

From the facts you provided, you are eligible to collect a survivor benefit from your deceased husband, but because you are working full time earning over $60,000 you will not be able to collect those benefits at this time. Here’s why: Social Security imposes an “earnings test” for anyone who collects benefits before reaching their full retirement age. The penalty for exceeding the earnings limit is $1 for every $2 you are over the limit (which is $19,560 for 2022). With $60,000 in earnings, you would be $40,440 over the limit, for which SS would impose a penalty of $20,220. That essentially means that your survivor benefit would be entirely (or almost entirely) offset by the penalty for exceeding the earnings limit, leaving you unable to collect a survivor benefit at this time. The earnings test is in effect until you reach your full retirement age (FRA), after which your earnings will no longer affect your Social Security benefits.

There are also other nuances you should know about. Claiming any SS benefit before reaching your FRA will result in a permanently reduced benefit. If claimed at your FRA, your survivor benefit would be 100% of the amount your husband was receiving (or entitled to) at this death but claimed at age 65 your survivor benefit would be reduced to about 93% of his benefit entitlement. Also, you will be eligible for your full widow’s benefit at 66 years and 2 months of age because – in your specific case – your “widow’s FRA” is less than your normal full retirement age.

However, the earnings test previously described is still in effect until you reach your normal FRA of 66 years and 6 months.

In the year you reach your normal full retirement age, the earnings limit (for the months prior to reaching your FRA) increases by about 2.5 times. You’ll reach your normal FRA in February 2024 and, at your current earnings level, wouldn’t exceed the higher earnings limit in 2024. That means the earnings test shouldn’t affect your SS benefits in 2024 at your current income level, so you could claim your full survivor benefit effective January 2024 without penalty.

You will also have the option, if desired, to claim only your survivor benefit and permit your personally earned SS retirement benefit grow. It would be wise to do that if your personally earned SS retirement benefit at maximum will be more than your maximum survivor benefit as a widow. After reaching your FRA, your personal benefit will grow by .667% for each month you wait to claim it, up to age 70 when your own benefit would be 28% more than it would be at your normal FRA. So, you could collect your full survivor benefit at your normal FRA, continue to work if desired, and switch to your higher personal benefit at age 70 (and collect that for the rest of your life). If you expect to achieve at least average longevity (about 87 for a woman your current age), and your own maximum benefit will be more than your benefit as a widow, that is an option you may wish to consider.

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