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Maximize Social Security Survivor Benefits

Prior to the passage of the Bipartisan Budget Act of 2015, Social Security (SS) benefits were quite generous for married (and even for divorced) couples, particularly for those with dual incomes. Spouses were not only entitled to benefits based on their own earnings, but also based on their spouse’s earnings. And the rules allowed them to collect on both. Alas, all good things always come to an end, and the above law did away with this and other valuable perks. Today when you file for SS benefits, unless you were born before January 1, 1954, you will only be entitled to the higher of your or your spouse’s benefits, not both.

Fortunately for widows and widowers, the old rules still apply. That means if you and your deceased spouse both earned income on which you were entitled to SS benefits, you can collect more benefits than if your spouse had still been alive. But you have to follow the right claiming strategy in order to do so.

Imagine you are a 60-year old widow, which means your full retirement age (FRA) is 66 years and 8 months. We’ll start with the case where your lifetime income was lower than your spouse’s. Suppose you are entitled to $800 per month in SS benefits (this is known as your primary insurance amount or PIA), while your spouse’s PIA is $2,200 per month. You could apply for your survivor benefit starting at age 60, but this would permanently reduce your monthly benefit to about 70% of your deceased husband’s PIA, or about $1,540 per month. A better strategy would be to wait until age 62 to apply for your own benefit, then switch to your survivor benefit at FRA. Ignoring cost of living adjustments, the first approach would provide you with only $369,600 by the time you reach age 80, while the second would generate $30,000 in additional benefits over the same period. And every month afterwards for the rest of your life you’d receive $2,200 under the second approach, 40% more than if you had taken the survivor benefit up front.

If your income had been higher than your spouse’s during your working lives, the best claiming strategy to follow would be a bit different. Let’s take the same example as above, but with the PIA’s reversed (yours is $2,200 per month and your deceased spouse’s is $800). In this case, rather than simply starting you own benefit at age 60, you can claim your survivor benefit instead and then switch to your own benefit at age 70. By delaying your own benefit you would avoid reducing it by taking it earlier than your FRA and further increase it by 8% per year from your FRA to age 70.  The cumulative difference in SS income over 20 years between these two strategies would be as high as $96,000.

You don’t qualify for SS survivor benefits if you had been married for less than 10 years, or if you had remarried before age 60.  But there are situations (such as remarrying after age 60 or having been divorced as well as widowed) that lend themselves to even more creative strategies to maximize future SS benefits.

Unfortunately, Social Security Administration (SSA) agents may not all be trained on the latest rules. Mary Beth Franklin, a nationally recognized expert in SS claiming strategies, has reported on situations where SSA agents denied a widow’s dual-claiming strategy under the mistaken belief that it went away in 2015. (As indicated above, it did disappear for retirement benefits, but not for survivor benefits). Your best source for identifying a claiming strategy designed to maximize your SS benefits if you are a widow or widower would likely be your financial planner. You owe it to yourself to take advantage of everything the government has to offer.



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