Social Security Widow(er) Benefit Question

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mikedm
Posts: 23
Joined: Thu Feb 27, 2014 9:18 pm

Social Security Widow(er) Benefit Question

Post by mikedm » Thu Aug 15, 2019 2:10 pm

I've been trying to determine the best social security strategy for me and my wife. Neither of us have claimed yet. Here's the basic information:

My age: 65
My Full Retirement Benefit: $2,804
My wife's age: 62
My wife's Full Retirement Benefit: $2,207

I've read Social Security Made Simple by Mike Piper. I've also run the numbers on the Open Social Security website. Both recommend a strategy for me to delay my benefits as long as possible (age 70), and my wife to start her benefit early (age 62). As the book explains, it is somewhat less advantageous for the lower PIA spouse to delay benefits because doing so only increases the amount the couple will receive while they're both still alive. This goes against what I've always understood, which is to delay as long as possible, but in the case of a married couple I can see the rationale for the lower earning spouse to claim earlier.

The question I have is, what if I die before age 70 and haven't started claiming my benefit? My understanding is my widow would receive the benefit I would have been receiving at the time/age of my death. Is this correct?

I'm curious if other Bogleheads are following this strategy or are doing something different, and if so why.

Thanks!

Silk McCue
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Joined: Thu Feb 25, 2016 7:11 pm

Re: Social Security Widow(er) Benefit Question

Post by Silk McCue » Thu Aug 15, 2019 4:58 pm

The tool only shows you the recommended claiming strategy without knowledge of your overall financial situation. Many folks here will delay beyond 62 up to an including age 70 for the lower earning spouse in order to support tax efficient Roth Conversions and or spendown of tax deferred assets to reduce RMDs at age 70.5 which can result in a spike in tax rates while allowing SS benefits to grow for the lower earning spouse since SS is favorably taxed at most 85%.

If you want to know what would happen if you died at 66 or 68 for example simply load your particulars into opensocialsecurity.com, check the "Advanced Options" at the top of the page and change your mortality table selection to "Assumed age at death" and run the scenario with an age of death. You will then see exactly what will happen in terms of benefits.

Cheers

Rudedog
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Re: Social Security Widow(er) Benefit Question

Post by Rudedog » Fri Aug 16, 2019 5:07 am

Friend of my wife just went through this. Her husband was 3 years younger than her. At her full retirement age, she received his social security benefit, in this case the max. She had claimed her benefit when she turned age 62, so she received the lower benefit until she was full retirement age.

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BL
Posts: 9332
Joined: Sun Mar 01, 2009 2:28 pm

Re: Social Security Widow(er) Benefit Question

Post by BL » Fri Aug 16, 2019 5:44 am

I believe you are right in your understanding that the date of death would be assumed to be the date he/she started SS if before age 70 and not already receiving SS.

If you both live a long life, I can see where you might have more total income from SS by both delaying. If one passes early, the survivor would have the larger payment for the rest of their life. Playing with the above-mentioned calculator might let you try various possibilities. As mentioned, not taking it early gives more time and space to lower RMDs by converting to Roth IRAs, as well as in looking at pre-Medicare health insurance costs when based on income.

I believe the grandfathering clause ended for those born after Jan 1, 1054, which I believe is the OP's case, so those "loopholes" would be closed for most folks now. If you were born after that date, the updated version of that book should let you know the current law.

SSA website says:
How and when is Social Security implementing this change? We have already implemented this change with specific instructions to our field office employees because the law applies to those who attain age 62 on January 2, 2016 or later. We are continuing to update our website and materials.
https://www.ssa.gov/planners/retire/claiming.html
Last edited by BL on Fri Aug 16, 2019 6:04 am, edited 1 time in total.

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JoeRetire
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Re: Social Security Widow(er) Benefit Question

Post by JoeRetire » Fri Aug 16, 2019 6:00 am

mikedm wrote:
Thu Aug 15, 2019 2:10 pm
The question I have is, what if I die before age 70 and haven't started claiming my benefit? My understanding is my widow would receive the benefit I would have been receiving at the time/age of my death. Is this correct?
As long as your wife waits until at least her FRA to claim survivor benefits, she will get an amount equal to what you would have been receiving, or her own benefit, whichever is bigger.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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BL
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Re: Social Security Widow(er) Benefit Question

Post by BL » Fri Aug 16, 2019 6:19 am

JoeRetire wrote:
Fri Aug 16, 2019 6:00 am
mikedm wrote:
Thu Aug 15, 2019 2:10 pm
The question I have is, what if I die before age 70 and haven't started claiming my benefit? My understanding is my widow would receive the benefit I would have been receiving at the time/age of my death. Is this correct?
As long as your wife waits until at least her FRA to claim survivor benefits, she will get an amount equal to what you would have been receiving, or her own benefit, whichever is bigger.
Yes, she would get maximum Survivor's Benefits at about FRA. She can decide if that is higher than her own benefit would be if she waits until age 70, assuming she has not drawn earlier. That does leave some options on whether to start SS age 62-70 or Survivors Benefits age 60-FRA and switch to the other if beneficial.

Note there are different rules for Spousal vs. Survivor's benefits.

Boatguy
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Joined: Fri Apr 19, 2019 7:54 pm

Re: Social Security Widow(er) Benefit Question

Post by Boatguy » Sat Aug 17, 2019 6:58 pm

You mentioned that you’re 65. I was 65 until last month, so I am now able to take advantage of spousal SS benefits without collecting my own and will receive my first payment within the next couple weeks. As mentioned in an earlier post, I think the assumption here is that you won’t be 66 until next year, correct? Assuming so because Open SS did not suggest that your wife file early so that you can collect spousal benefits.

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