By Larry Burgess, CFP
For widows and widowers, Social Security may provide an important survivor benefit after the death of a person that is receiving or is eligible for benefits. Provided the marriage lasted at least 9 months (waived in the event of accidental death), the survivor may be entitled to the full benefit that was being paid to the deceased spouse.
If death occurs prior to starting benefits, the survivor is entitled to the primary worker’s full retirement age benefit. Benefits may be paid to the survivor as early as age 60 (age 50 if disabled) but a reduction of 4.75% per year for each of the first six years is applied for starting before age 66. If the deceased worker postponed benefits in order to earn delayed retirement credits, the survivor is entitled to these extra credits as well less any reductions that may apply for starting early.
Divorced spouses may be entitled to survivor benefits provided the marriage lasted at least 10 years and they remain single until at least age 60. A divorced spouse collecting survivor benefits does not reduce the benefits entitled to a current spouse or other family members.
Survivor benefits, just like spousal benefits, may be reduced by the government pension offset if the surviving spouse is entitled to a pension from non-Social Security paying work. In addition, survivor benefits prior to full retirement age while still working are subject to the same benefit reductions as a worker’s earned benefit – a $1 reduction for every $2 earned above $1,290 per month to age 65 then $1 for every $3 above $3,450 per month prior to your 66th birthday. Survivors benefits may be claimed early and still allow the worker’s own benefit to grow and earn delayed retirement credits.
Social Security claiming strategies are complex, particularly spousal and survivor strategies. Additional tax considerations may impact a person’s timing decisions. It may be helpful to consult with a knowledgeable financial advisor before claiming benefits.
Larry W. Burgess is a Certified Financial Planning practitioner with more than 30 years experience as a financial advisor. He specializes in retirement income planning and regularly teaches an educational workshop on strategies to maximize Social Security benefits.