Dear Rusty: I am looking for information on my benefits. I am 60 years and 5 months old, and still employed. My spouse died in 2017 and would have been 61 years and 9 months old on July 31, 2019. My husband was the more highly compensated employee and was employed longer than myself. Signed: A Survivor
Dear Survivor: You are eligible for a survivor benefit from your deceased husband because you are now 60, but that survivor benefit will be considerably reduced (by about 28.5%) if you take it now. The survivor benefit is reduced if taken before your widow’s full retirement age (which is 66 ½ for you). Taken at your widow’s full retirement age (FRA) you’d be entitled to 100% of the benefit your deceased husband had earned at his passing. But if you take the survivor benefit now – before your normal full retirement age (66 years and 10 months) – and you are working, you’ll be subject to Social Security’s “earnings limit” which, if you exceed it, will cause Social Security to withhold some of your survivor benefits. The 2019 earnings limit is $17,640 and it will increase slightly each year until the year you reach your normal FRA, when it will increase by about 2 ½ times; then when you reach your normal FRA there is no earnings limit. What all of that means is that if you take the survivor benefit now and continue to work and earn, your survivor benefit will be reduced from what it could be, and Social Security will take back some benefits if you exceed the earnings limit (they’ll take back $1 for every $2 you are over the limit).
Assuming you have earned the requisite 40 credits from your own career, you will be eligible for your own Social Security retirement benefit at age 62, though your own benefit would also be reduced if you take it early (the reduction for your own benefit at age 62 will be about 29.2%). Since at 62 you will have a choice to take either the survivor benefit or your own benefit, you may want to set a goal of getting the highest possible benefit for the rest of your life. To do that I suggest you determine whether the maximum benefit you can get on your own work record (at age 70) is more than the maximum survivor benefit you can get at your widow’s FRA, and then follow a strategy which yields the highest benefit. You can get those numbers by contacting Social Security directly and asking for your own Statement of Estimated Benefits, and also asking for what your maximum survivor benefit will be. You can get the statement for your own estimated benefits online by creating a “My Social Security” account, but you will need to contact Social Security directly to get your maximum survivor benefit amount.
Once you are 62, you will have a choice of which benefit to choose and when to choose it. So, if your own SS benefit on your own work record will be more at age 70 than your survivor benefit will be at your widow’s FRA, you should consider taking the survivor benefit first and delaying your own benefit until it reaches maximum, at which point you would switch to your own benefit. However, If your own maximum benefit at age 70 will be less than the maximum survivor benefit you can get at your widow’s full retirement age, then you may wish to wait until you reach your widow’s full retirement age (66 ½) to claim the maximum survivor benefit. If you wait until your widow’s FRA to claim the maximum survivor benefit, and you need additional income while you’re waiting, you can claim only your own SS benefit at age 62, but remember that if you do so the earnings limit will still apply to your own SS retirement benefit until you reach your normal full retirement age.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].