Robert A. Di Ieso, Jr.
By Philip Moeller
June 2, 2016

Q. My spouse is much older than I am, and will most likely die well before I do. We’re confused about how survivor benefits would work in our situation. What can you tell us?

A. Social Security survivor benefits, which are paid to your spouse, ex-spouses or young children after you pass away, can be essential to the financial security of your family. Yes, the rules can be a complicated. But you can clear up the confusion by breaking down the process into these four steps.

1. Figure out the size of the benefit. The amount of the payment will be based on the earnings of the late spouse, the age at death, and whether he or she filed for retirement benefits before passing away. The key starting point here—and one that might be a pleasant surprise—is that survivor benefits are based on the retirement benefit the deceased would have been entitled to at full retirement age (FRA). (This is now 66 and will gradually rise to 67.)

If the deceased spouse has not filed for retirement benefits, and if he or she passes away between the ages of 62 and 66 (or 67), the survivor benefit will be equal to the benefit at FRA. For those who did file within that window, the payment to the surviving spouse will be a partial percentage of the FRA entitlement. This is a complex calculation, and it should be reviewed carefully with a Social Security representative.

By contrast, if the late husband or wife had reached FRA and then filed for retirement benefits, the survivor benefit will equal that payout. What if the deceased spouse never filed and passes away after reaching FRA? The survivor is entitled to a payment equal to the deceased’s retirement benefit as of the day of death.

2. Choose the right time to file. The next task for the surviving spouse to figure out when to claim the survivor benefit. You can file as early as age 60 or wait until your FRA, when this benefit will reach its maximum amount. The benefit is subject to early claiming reductions if you claim it before FRA. So you will need to balance your current cash needs with the prospect for a higher payout later.

3. Assess your own retirement benefit. Check the amount you will be entitled to receive at different ages based on your individual work history. You can do this by going online and creating a mySocialSecurity account. The calculator will use your official wage record of earnings, which will reflect the payroll taxes you have paid.

4. Map out your claiming strategy. This is where it gets a bit tricky. You will need to coordinate your own benefit with the survivor benefit. Depending the size of the two benefits, you may be better off filing first for one and deferring the other—or you may end up opting for just one benefit.

It’s important here to know that survivor benefits are not subject to Social Security’s “deeming” rules. This means you can file for a survivor benefit without also triggering the simultaneous filing for your own retirement benefit. Otherwise, you would be giving up delayed retirement credits. (Your retirement benefits grow 7% to 8% a year for each year you defer until age 70.)

For example, you could file for your survivor benefit at any time between the age of 60 and your FRA. Assume here that it would be $1,620 at age 60, growing to $2,000 at age 66. Then, at age 70 you can file for your own retirement benefit, which has grown to a maximum amount of, say, $2,300. Because it exceeds the survivor payout, you are clearly better off deferring your own benefit.

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Or it could work the other way—perhaps your spouse was the high earner, so your survivor benefit is much larger than your retirement benefit. In this case, the optimal strategy is to wait and file for the survivor benefit at FRA, when the payment maxes out. This is the benefit you will want to lock in for the rest of your life.

In this scenario, you should also claim your own retirement benefits as soon as possible after turning 62. (People with disabilities can file sooner.) There’s no downside to this move, since deeming does not apply to survivor benefits. Filing for retirement at 62 will trigger a separate set of early claiming reductions. But because you will be filing for your survivor benefit at your FRA, you will still come out ahead by filing for retirement benefits as soon as you can.

One last tidbit: your survivor benefits will receive annual cost-of-living adjustments, even if you don’t claim them right away. If your spouse dies before you’re old enough to claim a survivor benefit, the payment you eventually claim will have received any annual COLAs between the time your spouse died and the time you claim the benefit.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of the recently updated New York Times bestseller, “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” His companion book, “Get What’s Yours for Medicare: Maximize Your Coverage; Minimize Your Costs,” will be published in October. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

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