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Social Security Reform Becomes A Divisive Issue
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Q: I'm drawing my full Social Security benefit, which I qualified for at age 66. My wife is 54, so I will most likely pass away before she does. My monthly benefit is approximately $2,380, much more than her expected benefit. If she claims mine, will she get 100% of my benefits?

A: It depends. As a widow, your wife would be able to get 100% of your Social Security benefits as long as she waited until she reached her full retirement age to claim them. Full retirement age is determined by year of birth. Since your wife was born after 1959, her full retirement age is 67.

There’s a cost to taking survivor benefits earlier. As a widow, your wife would be able to file for that income stream as soon as she turns 60. If she does, however, those benefits will be reduced by 28.5%. That means for every $1,000 in benefits that you received, she would receive only $715. The longer she waits to claim your benefits, the smaller the reduction, until it disappears entirely on her 67th birthday.

If your wife is working, there may be an additional reduction for claiming benefits early. In 2017, Social Security recipients below full retirement age start losing benefits once they earn more than $16,920 a year, a limit pegged to the national average wage index.

“Social Security starts to withhold $1 in benefits for every $2 over that limit,” explains Kurt Czarnowski, a retirement planning consultant and former regional communications director for the Social Security Administration in New England. At the beginning of the year that a person reaches full retirement age, the reduction drops to $1 for every $3 above the earnings limit, which itself increases.

The reduction disappears entirely at full retirement age. At that point, Social Security will increase your benefit to account for the number of months you lost some or all of those payments.

Note that there is no advantage in waiting past full retirement to file for survivor benefits. The amount won’t get any higher once that milestone is reached.

The Social Security math is different for every survivor. One variable is when and whether the deceased claimed Social Security. If that person had already claimed Social Security, the survivor benefits would be based on the amount that the deceased was actually receiving. The survivor of a spouse who hadn’t yet claimed Social Security, however, is entitled to the benefit that would have been paid at full retirement age.

If the first-to-die spouse was past full retirement age and had not yet filed, survivor benefits would be based on the amount he or she was entitled to receive at the time of death. That would include delayed-retirement credits that boost Social Security income by up to 8% a year for each year beyond full retirement age, up to age 70.