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The Widow's Guide to Social Security Benefits

Jane Young

As a Certified Financial Planner™, I work with a lot of widows trying to navigate the tricky world of Social Security benefits after their spouse passes away.

Social Security provides you, as a widow, with a choice between your own Social Security benefit based on your work history, and a survivor’s benefit based on your deceased spouse’s work history. Social Security is gender neutral, therefore this information applies to both widows and widowers.

When You Can Start Taking Benefits

You are entitled to 100% of your deceased spouse’s benefit at full retirement or you can take reduced benefits as early as age 60. If you are disabled, you can begin taking benefits at 50. The full retirement age is 66 if you were born between 1945 and 1956, and gradually increases up to 67 if you were born between 1957 and 1960. The normal retirement age for everyone born after 1960 is 67.

[Related Article: What Happens to You Social Security Benefits When You Die?]

As a widow, you have the option to begin taking benefits based on your own earnings record and later switch to survivor’s benefits, or you can begin with survivor’s benefits and later switch to benefits based on your own record. While collecting survivor’s benefits, you can earn delayed retirement credit on your own Social Security, but you cannot earn delayed retirement credit on survivor’s benefits.

Unfortunately, at any given time you have to select either survivor’s benefits or your own benefits, you are not entitled to both. Don’t wait beyond 70 to begin taking Social Security because there is no additional increase in the benefit after age 70. If you were already receiving Social Security benefits before your spouse’s death, you can call Social Security to see if you will earn more money collecting survivor’s benefits.

Generally, you cannot get survivor’s benefits if you remarry before age 60. After age 60 remarriage does not impact your survivor’s benefits. At age 62 you are entitled to benefits based on a new spouse’s work record, if those would be higher. If other family members are entitled to survivor’s benefits, be aware that there is a limit to the total amount that can be paid to a family.

Just Because You Can, Doesn’t Mean You Should

Generally, if you plan to keep working, you can cover your current expenses, and you are in reasonably good health, you should delay taking Social Security benefits until full retirement. If you take Social Security or survivor’s benefits before your normal retirement age and you earn over a certain level, Social Security will withhold part of your benefit.

In 2013, Social Security will withhold $1 in benefits for every $2 of earnings above $15,120, and $1 in benefits for every $3 of earnings above $40,080 in the year you reach full retirement age. However, when you reach full retirement age your benefit is recalculated to give you credit for the benefits that were withheld as a result of earning above the exempt amount.

[Related Article: 3 Ways Student Loans Can Wreck Your Retirement]

Once you reach normal retirement age, you can keep working and your benefits will not be reduced regardless of your earnings. However, if you are still working while taking Social Security, you may end up paying taxes on a much larger portion of your benefits.

Taking Social Security early also results in a reduced benefit based on the number of months you receive Social Security before your normal retirement age. If you were born in 1960 and you take benefits at 62 your maximum reduction would be around 30%. You may be able to begin by taking a reduced survivor’s benefit before your normal retirement age, and then switch to an unreduced benefit based on your own earnings record, at full retirement age.

What Could Reduce Your Benefits?

If you receive a pension from a job you held with a government entity and you did not pay Social Security tax, your Social Security survivor’s benefit may be reduced. Additionally, if you collect Social Security benefits based on your own work history and you earned a pension from a job in which you didn’t pay Social Security, the Windfall Elimination Provision may reduce your Social Security benefit. Be sure to discuss this with your Social Security representative when you file for benefits.

Social Security can be extremely complex and widows have many opportunities to optimize their benefits. Before filing for Social Security, please research the options available to you and meet with a Social Security representative to fully understand your choices.

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