Ask Larry: Will My Social Security Widow’s Benefit Really Not Equal My Spouse’s Retirement Benefit?

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Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s column addresses survivor benefits based on the record of a worker who delays filing until 70, which month to apply to get full retirement age benefits with no reduction, eligibility for spousal benefits, how the earnings test works and how the WEP is figured. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, a company that markets Maximize My Social Security and MaxiFi Planner. Both tools maximize lifetime Social Security benefits. MaxiFi also finds retirement account withdrawal strategies and other ways to lower your lifetime taxes and raise your lifetime spending. Most important, it suggests how much to spend and save each year to enjoy a stable living standard through time.

See more Ask Larry answers here.

Ask Larry about Social Security here.

Will My Social Security Widow’s Benefit Really Not Equal My Spouse’s Retirement Benefit?​​

Hi, My husband went in to apply for his Social Security benefits at age 68 and 4 months. They insist that even if I’m age 66 or beyond when my husband passes away, I will not be entitled as a surviving widow to receive any of his delayed credits. They say my widow’s benefit will be his PIA at his FRA of 66. They are also pressing us to take a lump sum based on his benefit for the previous six months. Of course this will reduce his monthly payments. We are now so confused. Please tell me, where I can get the real truth about all of this? I am currently 63 and 3 months. My husband is no longer able to work due to his health. Thanks, Sharon

Hi Sharon, You apparently can’t get the real truth from the Social Security employee that you spoke with, since what they told you is simply wrong. If your husband dies before you, your widow’s rate will include credit for any delayed retirement credits (DRCs) that your husband earns by waiting past full retirement age (FRA) to start drawing his retirement benefits.

Therefore, if your husband waits until 70 to start drawing his retirement benefits and subsequently dies before you, you would be eligible to receive his full age 70 rate as his widow provided that you’re at least FRA when you claim widow’s benefits. If your husband starts drawing his retirement benefits at age 68 instead of age 70, his monthly benefit rate will be 16% lower than his age 70 rate, and that lower rate would carry over to your potential future widow’s benefits. And if your husband opts to claim retroactive retirement benefits for months prior to age 68, that would lower the monthly rate even further.

Of course, if your husband needs to claim his Social Security benefits now in order to make ends meet, perhaps waiting until age 70 to file may not be a realistic option for him. The fact remains, though, that the sooner he claims his benefits prior to age 70, the lower both his monthly benefit rate and your future potential widow’s rate will be. If you haven’t already done so, you and your may want to use one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to help maximize your lifetime Social Security benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


What Start Date Should I Use When I Apply?​​

Hi Larry, When I apply for benefits, what start date would I use? My birth date is the last day of the month and so therefore my FRA is reached on the last day of the month. Do I use my birth month as my starting month, or the following month? Thanks, Dave

Hi Dave, Assuming you want to receive your full retirement age (FRA) rate with no reduction for age nor increases from delayed retirement credits (DRC), you’d choose your birth month (i.e. the month you reach FRA) as your month of election to start benefits. Your first payment, which would be for your birth month, would then be due in the month following your birth month since Social Security pays benefits a month behind. And, since you were born after the 20th of the month, your payments would normally be scheduled for the 4th Wednesday of each month. Best, Larry

Is My Wife Eligible For Any Benefits?​​

Hi Larry, I plan to stop working at 68 but I will not draw on my Social Security until 70. When I’m 70, my wife will be 57. She did not work much in her life to earn Social Security. Is she entitled to any benefits? If I die in my 70s and she is still below 62, can she collect a widow’s benefit on my Social Security work record? Thanks, Gary

Hi Gary, Your wife couldn’t qualify for spousal benefits until she’s at least 62, unless she has a child in her care who is under age 16 or disabled and who’s eligible for benefits on your record. And if she starts drawing spousal benefits prior to her full retirement age (FRA), they’ll be reduced for age.

If you die before your wife, she could potentially qualify for widow’s benefits on your record as early as age 60, or as early as age 50 if she’s disabled. Again, though, if she starts drawing widow’s benefits prior to FRA they’d be significantly reduced for age. Best, Larry


Can I Work 32.5 Hours A Week And Also Get My Social Security?

Hi Larry, I will be 62 in July. I work 32.50 hours a week — could I get my Social Security and keep working as well? Thanks, Debby

Hi Debby, The answer to your question depends on how much you’re earning. You could potentially be paid reduced Social Security benefits starting at age 62 for any months that you earn no more than $1,470, or if you earn no more than $17,640 during the calendar year of 2019. If you’ll be earning more than $1,470 in all months this year, Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $17,640. That could result in full or partial withholding of your benefits depending on your benefit rate and the amount of your earnings. Best, Larry


How Will Social Security Calculate The WEP Guarantee Amount In My Case?​​

Hi Larry, I applied for my US Social Security benefits to start just after my 65th birthday. For the last 10 years, I have been receiving a company pension from my German employer which is not based on income taxed by Social Security of course. I understand that my Social Security benefits will be affected by Windfall Elimination Provision and that the benefit reduction should not be larger than one half of my non-covered pension. SSA will use for this calculation the amount of my non-covered pension and the exchange rate at the date when I am entitled to both of these pensions. Which date is it? The month and year when I turned 62? The month when I applied for Social Security benefits or when I start receiving them? Thanks, Mitch

Hi Mitch, The Windfall Elimination Provision (WEP) guarantee is based on 50% of the amount (in US dollars) of your non-covered pension in your first month of concurrent entitlement to the non-covered pension and Social Security benefits. Your month of entitlement is the month that you choose to start drawing your benefits. For example, if you file an application for Social Security benefits in February and you choose to start your benefits effective with May, then May would be your month of entitlement. Best, Larry

To learn more about your Social Security options, visit Economic Security Planning, Inc.

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