Social Security benefits for surviving spouse

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JamesPSullivan
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Social Security benefits for surviving spouse

Post by JamesPSullivan » Wed Aug 13, 2014 10:06 am

I have a question concerning social security benefits for a surviving spouse/widow. My mom is 62 and my dad was 66 when he passed away last week. My mom has a telephone appointment with a SS representative tomorrow, but I wanted to get a little info prior to her call. (My dad has handled their finances 100%, so she knows very little.)

She had already started receiving SS benefits prior to his illness and death. I'm not sure if my dad had started yet or not. I'm guessing no because he was working part-time and earning close to six figures. His benefits will be around $700 more per month than hers.

Since I'm in my mid-thirties and know absolutely nothing about SS, will she receive a reduced benefit because she is not 65? Or will she be able to receive his full benefit since he was older than 65? Will she be able to receive any of her own SS benefit while receiving his benefit?

Again, I know nothing about SS, so any help would be appreciated.

And if you need more info to provide better answers, let me know.

sscritic
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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 10:10 am

Does she need the money? She can keep her own benefit now and switch to his at her Full Retirement Age (66 if born in 1952). If she takes the widow's benefit before then, it will be reduced permanently.

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Re: Social Security benefits for surviving spouse

Post by JamesPSullivan » Wed Aug 13, 2014 10:25 am

She definitely doesn't need the money. How much is the benefit reduced by if taken prior to age 66 (she was born in 52)?
And thanks for the quick response!

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Re: Social Security benefits for surviving spouse

Post by Penguin » Wed Aug 13, 2014 10:27 am

Another choice might be mother may withdraw her application for her own benefit and repay what she has received. She may then collect a widow benefit (reduced for collecting early) until she is age 70 when she can collect a benefit that is about 57% higher than she is collecting now.
Jon

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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 10:36 am

I think she shouldn't make any final decisions tomorrow. What she should do is find out his Primary Insurance Amount (PIA) and her own PIA. Her benefit as herself is her PIA multiplied by some number. Today, it is one number, but if she withdraws her application and waits until 70 to re-apply, it will be another number. The same is true of her benefit as a widow, except that it is a multiple of his PIA. It is one number if she applies today and another if she waits until age 66.

So here are some additional questions she can ask after she asks for both PIAs.

1) how much would I get as a widow today?
2) how much would I have to pay back if I withdraw my application for retirement benefits (her own)?
3) how much would I get as a widow if I apply today and also withdraw my application for retirement benefits?
4) how much would I get as a widow if I wait until FRA (66) to apply?
5) if I withdraw my application for retirement benefits and reapply at 70, how much would I get as retirement benefits?

There might be some others she wants to ask, but all the answers depend on the two PIAs.

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Re: Social Security benefits for surviving spouse

Post by JamesPSullivan » Wed Aug 13, 2014 2:41 pm

Dang! Why can't this be a little easier to understand?
Thanks for the information Penguin and sscritic.

Penguin - using the option you listed. Would she receive widow benefit until age 70 and then receive her own benefit starting at age 70 (and it would only be her own benefit)? I don't know if this matters or not, but my dad made at least 5-6 times as much as my mother.

Knowing my mother, I don't think she is going to want to bother with repaying monies already received. So before knowing any numbers, it sounds like her best option would be to keep receiving her own benefits until age 66 and then start receiving widow benefits (because it will not be reduced due to early retirement).

Would there ever be a time where she would receive her own benefits and widow benefits?

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Re: Social Security benefits for surviving spouse

Post by Penguin » Wed Aug 13, 2014 2:48 pm

Penguin - using the option you listed. Would she receive widow benefit until age 70 and then receive her own benefit starting at age 70 (and it would only be her own benefit)? I don't know if this matters or not, but my dad made at least 5-6 times as much as my mother.
Yes. Very likely the widow benefit would be higher than her own benefit at age 70 so she would just keep the widow benefit.
Would there ever be a time where she would receive her own benefits and widow benefits?
As far as I know this is not possible.
Jon

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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 4:10 pm

Penguin wrote:
Would there ever be a time where she would receive her own benefits and widow benefits?
As far as I know this is not possible.
Technically, she will always get her own benefit. Say her benefit is $1000. Say the widow's benefit is $2400. What she will get is $1000 + $1400 = $2400. That may look like $2400, but it is really her own $1000 plus an extra $1400 because of him.
Method B - Both benefits calculated and reduced independently; small MBA paid plus excess of larger MBA.
NOTE: If larger MBA is a RIB or DIB just pay the RIB or DIB.
...
A spouse is entitled to a benefit of $1000 before reduction. She is also entitled to a RIB of $400 before reduction. Each benefit is reduced separately. The spouse benefit is reduced to $900 and the RIB is reduced to $380. The reduced RIB is subtracted from the reduced spouse benefit. The result is the excess spouse benefit payable - $520. The total paid is $900, the sum of the reduced excess spouse benefit and the reduced RIB.
The references to reduction refer to before FRA, so ignore them. RIB is retirement; MBA is monthly benefit amount. My example used $2400 (not $1000) and $1000 (not $400). $1000 is subtracted from $2400. The result is the excess widow benefit payable. The total paid is $2400, the sum of $1400 and her own retirement benefit.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 4:21 pm

Edit: deleted--I now realize I was misinterpreting the context of sscritic's statement.
Last edited by dodecahedron on Thu Aug 14, 2014 12:01 pm, edited 1 time in total.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 4:24 pm

Alternatively, she could continue to collect her own work record benefits ONLY and let her late husband's benefits grow until they max out when she is FRA of age 66. And it is worth noting that the fact that she claimed her own work benefits early would not in anyway impinge upon her widow's benefits at age 66 (even though they would have impinged on her spousal benefits had her spouse remained alive through that period.)

And note that one really can't rely on advice from SSA employees, who are hardpressed to keep up with all these complex rules. This really takes some careful analysis.

http://www.forbes.com/sites/ashleaebeli ... y-mistake/
Last edited by dodecahedron on Wed Aug 13, 2014 4:27 pm, edited 1 time in total.

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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 4:27 pm

dodecahedron wrote: I don't believe this is true, sscritic. This is the way spousal benefits work but not survivor benefits.

For example, I am a widow and can claim widow's benefits ONLY from age 60 onwards (or age 50 if disabled) and not touch my work record benefits at all, let them grow until I am age 70.

In her case, it may be somewhat different because she already filed for her work record benefits, but since she is only 62, it was obviously recently and it may be possible for her to roll back the clock to put herself in my situation by repaying her own work record benefits. Then she could file as a widow ONLY now and collect those benefits until she is 70 and her own-benefits have grown maximally.
You don't get a benefit you don't apply for. The only way to get two benefits is to apply for two benefits. That is what the question was. If you only apply for one benefit, you will only get one benefit. That is your situation. If you were to apply today for your own benefit, then assuming you were otherwise eligible, you would be "getting" two benefits and what I said would apply. When you are entitled to two benefits, you are called dual entitled.
A spouse is entitled to a benefit of $1000 before reduction. She is also entitled to a RIB of $400 before reduction.
You are not entitled to two benefits yet, so this is not you.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 4:31 pm

Edit: deleted--I now realize I was misinterpreting the context of sscritic's statement.
Last edited by dodecahedron on Thu Aug 14, 2014 12:02 pm, edited 1 time in total.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 4:37 pm

Larry Kotlikoff gives a good exposition of the options here. Notice that he makes very clear that it is definitely possible to collect either benefit ALONE early while leaving the other benefit untouched to grow (something that would not be possible for a 62-year-old spouse whose husband is still alive.)

http://www.pbs.org/newshour/making-sens ... mplicated/

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 4:48 pm

For some free and pretty expert advice, I would suggest the OP submit the question about mother's case to the Ask Larry Kotlikoff feature on the PBS Newshour website. Larry has access to a knowledgeable veteran SSA retired employee as a consultant on tough situations and Larry himself is sufficiently knowledgeable about the complexities of the current system that Congress was interested to hear his testimony recently.

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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 4:57 pm

dodecahedron wrote: sscritic, dual entitlement applies to spouses of the living. surviving spouses' benefits are not a dual entitlement. They are an either/or entitlement. The OP's mother is not entitled to any "spousal benefits." She is entitled to "surviving spouse" benefits, which are under a completely different system.
Here is what I see in the POMS on the dual entitlement overview.

Code: Select all

A then D                  b
A with D                  b
A is self old-age; D is widow. A with D is a dual entitlement. The method used is method b.
List of Most Common Beneficiary Identification Codes

A - Retirement on own work record
B - Aged Wife
B1 - Aged Husband
B2 - Young Wife (with child in care)
B6 - Divorced Wife
C - Child
D - Aged Widow
from link in the wiki

I don't know where you found your definition of dual entitlement, but the POMS is pretty clear.
1. General

A person may be entitled to more than one benefit at the same time.
P.S. You can't be a widow if you never married. A widow's benefits are a result of her being a spouse. A spouse is not someone getting spousal benefits. I am not sure that spousal benefits even exist. There is a benefit for a husband, and there is a benefit for a wife, but I don't see a benefit for a spouse in the list of codes. There are benefits for surviving spouses, which by simple logic means that someone is dead, if they have a child in care. Those are called mother's benefits (see code E - Young Widow (mother)).
How do I become entitled to mother's or father's benefits as a surviving spouse?
Even Es can be dual entitled.

Code: Select all

E/F and HA 	      b

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Re: Social Security benefits for surviving spouse

Post by sscritic » Wed Aug 13, 2014 5:02 pm

dodecahedron wrote:Larry Kotlikoff gives a good exposition of the options here. Notice that he makes very clear that it is definitely possible to collect either benefit ALONE early while leaving the other benefit untouched to grow (something that would not be possible for a 62-year-old spouse whose husband is still alive.)

http://www.pbs.org/newshour/making-sens ... mplicated/
I know what the word either means. He said take either. That means that ONE or the other ONE, but not both (TWO). That's exactly what I said. If you only apply for one, you only get one. One is not two (dual). Two is two (dual).

This will probably get me suspended, but I know the difference between one and two.

P.S. Goodbye

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Wed Aug 13, 2014 5:50 pm

James, first of all, my condolences to you and your mother on the very recent loss of your father (and my apologies for not expressing them earlier.)

sscritic, I am not sure of the precise usage of the of the SSS term dual and I am surprised that the SSA is still using the gender-laden terms "husband" and "wife" in this day and age (when SS is completely gender-neutral in operation), but just to clarify the bottom line of where I was disagreeing with you originally was that it is not true that a surviving spouse who has also a work record will necessarily collect on her own record whenever she files to collect as a widow.

It seems as if I may have been misinterpreting your terminology and that we both fundamentally agree on the bottom line of the potential choices facing the OPs mother, which I had stripped down in my own mind to a more mathematically elegant presentation than SS apparently uses. I was not saying she could ever collect BOTH benefits at the same time. I was simply disagreeing with notion that one benefit would necessarily have to be viewed as an increment to the other (if she is able to withdraw her previous application for one and file for the other.)

Anyway, I doubt all this confusion is helping James and I still think the bottom line is to get some knowledgeable guidance given the specifics of her situation. I do think sscritic's point (which I think I misinterpreted earlier) is very important: it is definitely never the case that she would get $3,450 (using the work record and surviving spouse entitlement figures in his original example.)

Again, my sincerest condolences to your family, James. It has been over a year for me now, but it is still hard. I just signed estate tax returns and probate documents this morning (on extension) and will begin attacking my final joint return tonight. As I scroll through the records immediately before and after his death (to allocate between the 1040 and the 1041), I remember afresh the pain of that first week.

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Re: Social Security benefits for surviving spouse

Post by JamesPSullivan » Thu Aug 14, 2014 9:51 am

Thank you for all the responses so far. One last question or two.

Since the benefit is calculated as her benefit plus the difference in her benefit and my dad's benefit, will her benefit portion always be reduced because she starting receiving benefits early?

She has only received a few months worth of her benefits. Is there any scenario in which she can receive my dad's full benefit, but still receive her own reduced benefit up until age 66?

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Re: Social Security benefits for surviving spouse

Post by JamesPSullivan » Thu Aug 14, 2014 10:28 am

My mom just got off the phone with SS, and the numbers they gave her don't sound correct.

She can receive $808 from my dad's benefit if she takes it now which is 42 months early. Or she can wait the 42 months until age 66 and receive $858 from my dad's benefit. Can this be correct? It would be a no-brainer to start receiving the additional benefit now. My calculations say it would take approximately 56 years receiving $858 per month to make up for the 42 month delay.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 10:54 am

JamesPSullivan wrote:Thank you for all the responses so far. One last question or two.

Since the benefit is calculated as her benefit plus the difference in her benefit and my dad's benefit, will her benefit portion always be reduced because she starting receiving benefits early?

She has only received a few months worth of her benefits. Is there any scenario in which she can receive my dad's full benefit, but still receive her own reduced benefit up until age 66?
(To keep things simple, I will assume that your father is the only spouse your mother had in her lifetime. If she had multiple marriages over the course of her life that could complicate things.)

My understanding is that a widow who files early for ONLY her own record benefit will still be able to claim the full amount of the widow(er) benefit at FRA, without any reduction for having claimed her own record benefit earlier. In fact, that is exactly what I am planning to do. At 62, I will file on my own record ONLY (collecting 75% of my PIA based on my record) and at FRA of 66, I will file as a widow and collect 100% of my late husband's PIA, unreduced for the fact that I claimed my own benefits early.

Now one issue for your mother is that at the time she filed early, she was not yet a widow since your father was still living at the time she filed for her own record benefits. That might complicate things a bit, especially if your father was receiving SS benefits at the time of his death. But there might be some kind of workaround, which is why I think she should get expert advice.

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Re: Social Security benefits for surviving spouse

Post by sscritic » Thu Aug 14, 2014 10:56 am

Did she ask for the PIAs?

The numbers don't seem right.

The reduction for starting as a widow 42 months early is 0.285 (the maximum reduction) times 42/72 <-- (months from age 60 to her FRA of 66)
or 16.625%. If the full widow benefit is $858, then (1 - 0.16625) 858 = $715.

Plus, if he made as much as you said, his PIA should be higher than $858. You said his benefit was $700 more than hers. Is hers really only $100?

You should find out if he had started or not. If he had started, what was his benefit?

This doesn't seem right.

I wonder if she can authorize you to speak to SS for her.

The reduction formula
Your widow's or widower's unreduced benefit amount (the worker's primary insurance amount after any reduction for the family maximum under § 404.403), is reduced or further reduced based on the number of months of entitlement prior to the month you attain full retirement age. This does not include any month in which you have in your care a child of the worker on whose earnings record you are entitled. The child must be entitled to child's benefits. The number of months of entitlement prior to full retirement age is multiplied by .285 and then divided by the number of months in the period beginning with the month of attainment of age 60 and ending with the month immediately before the month of attainment of full retirement age.

Example: Ms. Bogle is entitled to an unreduced widow benefit of $785.70 beginning at age 64. Her full retirement age for unreduced old-age benefits is 65 years and 4 months. She will receive benefits for 16 months prior to attainment of full retirement age. The number of months in the period from age 60 through full retirement age of 65 and 4 months is 64. The reduction in her benefit is $785.70 × 16 × .285 divided by 64 or $55.98. $55.98 is rounded to the next higher multiple of 10 cents ($56.00) and subtracted from $785.70. The result is a monthly benefit of $729.70.
P.S. I bet a lot of you didn't know how famous Ms. Bogle was. :)

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Re: Social Security benefits for surviving spouse

Post by sscritic » Thu Aug 14, 2014 11:06 am

dodecahedron wrote: But there might be some kind of workaround, which is why I think she should get expert advice.
If bogleheads aren't experts, why do people ask questions here? Because we are all know-nothings?

Penguin gave her the workaround in the second non-OP response: withdraw her application for her own benefit. Once she withdraws, it will be as if she never applied; i.e., her only entitlement will be to her widow's benefit if she applies for it, but she has to withdraw within 12 months of her starting date.

Whether this is a good plan depends on whether delaying until 70 to collect on her own record is greater than what she would get delaying until 66 to claim the widow's benefit and what the differences are in the intervening months. Which is why we need the actual numbers: her PIA and his if he had not started collecting, otherwise his benefit if he had.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 11:07 am

I agree with sscritic. Those numbers your mother is quoting from SSA really do NOT sound right!

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 11:14 am

sscritic wrote:
dodecahedron wrote: But there might be some kind of workaround, which is why I think she should get expert advice.
If bogleheads aren't experts, why do people ask questions here? Because we are all know-nothings?

Penguin gave her the workaround in the second non-OP response: withdraw her application for her own benefit. Once she withdraws, it will be as if she never applied; i.e., her only entitlement will be to her widow's benefit if she applies for it, but she has to withdraw within 12 months of her starting date.

Whether this is a good plan depends on whether delaying until 70 to collect on her own record is greater than what she would get delaying until 66 to claim the widow's benefit and what the differences are in the intervening months. Which is why we need the actual numbers: her PIA and his if he had not started collecting, otherwise his benefit if he had.
I agree that Penguin's workaround works if she wants to have the option of letting her own record benefit grow until she is 70.

But I am talking about a different workaround. What about a workaround that would allow her to collect *on her own record only* until age 66 (FRA), when she collects her maximized widow's benefit. As I understand it, she filed at 62, she still had a living spouse so she was "deemed filing" for spousal benefits at the time, which means she has been receiving spousal benefits already (or should have been, since an early claiming worker with a living spouse gets no benefit from deferring claim on living spousal benefits.) So the checks she has be getting thus far presumably include some living spousal benefits?

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Re: Social Security benefits for surviving spouse

Post by pshonore » Thu Aug 14, 2014 11:37 am

dodecahedron wrote:
sscritic wrote:
dodecahedron wrote: But there might be some kind of workaround, which is why I think she should get expert advice.
If bogleheads aren't experts, why do people ask questions here? Because we are all know-nothings?

Penguin gave her the workaround in the second non-OP response: withdraw her application for her own benefit. Once she withdraws, it will be as if she never applied; i.e., her only entitlement will be to her widow's benefit if she applies for it, but she has to withdraw within 12 months of her starting date.

Whether this is a good plan depends on whether delaying until 70 to collect on her own record is greater than what she would get delaying until 66 to claim the widow's benefit and what the differences are in the intervening months. Which is why we need the actual numbers: her PIA and his if he had not started collecting, otherwise his benefit if he had.
I agree that Penguin's workaround works if she wants to have the option of letting her own record benefit grow until she is 70.

But I am talking about a different workaround. What about a workaround that would allow her to collect *on her own record only* until age 66 (FRA), when she collects her maximized widow's benefit. As I understand it, she filed at 62, she still had a living spouse so she was "deemed filing" for spousal benefits at the time, which means she has been receiving spousal benefits already (or should have been, since an early claiming worker with a living spouse gets no benefit from deferring claim on living spousal benefits.) So the checks she has be getting thus far presumably include some living spousal benefits?
You cannot get a spousal benefit unless the other half is collecting or did the file and suspend method. Indications are the husband did not do that.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 11:43 am

pshonore wrote:You cannot get a spousal benefit unless the other half is collecting or did the file and suspend method. Indications are the husband did not do that.
Good point, though this should be verified, since he did say his father didn't share much information about finances. Since his father was 66, it is entirely possible he had filed for benefits, notwithstanding the "close to six figure" part-time earnings, since many people don't realize the benefits of waiting, especially once they hit FRA.

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Re: Social Security benefits for surviving spouse

Post by sscritic » Thu Aug 14, 2014 1:12 pm

dodecahedron wrote: I agree that Penguin's workaround works if she wants to have the option of letting her own record benefit grow until she is 70.

But I am talking about a different workaround. What about a workaround that would allow her to collect *on her own record only* until age 66 (FRA), when she collects her maximized widow's benefit. As I understand it, she filed at 62, she still had a living spouse so she was "deemed filing" for spousal benefits at the time, which means she has been receiving spousal benefits already (or should have been, since an early claiming worker with a living spouse gets no benefit from deferring claim on living spousal benefits.) So the checks she has be getting thus far presumably include some living spousal benefits?
Yes, but that is irrelevant to whether she will continue to collect as herself. When your husband dies, you are no longer a wife. If you are not a wife, you cannot collect a wife's benefit.
§ 404.332. When wife's and husband's benefits begin and end.
...
(b) Your entitlement to benefits ends with the month before the month in which one of the following events first occurs:
  • ...
    (5) The insured person dies or is no longer entitled to old age or disability benefits.
The fact that she is no longer a wife does not mean that she is no longer herself. As I stated before, she always gets her own benefit. When a wife gets a $1000 benefit as a "wife," what she is really getting is her own benefit plus an additional amount. The sum $600 + $400 may be the same as $800 + $200 and in turn be the same as $0 + $1000, but they are not the same calculation. When the second term disappears and she is only herself and no longer a wife, she will get $600 or $800 or $0. It matters.

People call the total the wife's benefit, but it is not. The wife's benefit is only the part that is added to her own benefit. Using loose language in a technical field is not a good idea. It only leads to confusion.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 2:07 pm

sscritic wrote:
dodecahedron wrote: I agree that Penguin's workaround works if she wants to have the option of letting her own record benefit grow until she is 70.

But I am talking about a different workaround. What about a workaround that would allow her to collect *on her own record only* until age 66 (FRA), when she collects her maximized widow's benefit. As I understand it, she filed at 62, she still had a living spouse so she was "deemed filing" for spousal benefits at the time, which means she has been receiving spousal benefits already (or should have been, since an early claiming worker with a living spouse gets no benefit from deferring claim on living spousal benefits.) So the checks she has be getting thus far presumably include some living spousal benefits?
Yes, but that is irrelevant to whether she will continue to collect as herself. When your husband dies, you are no longer a wife. If you are not a wife, you cannot collect a wife's benefit.
Totally agree that, as a widow, the OP's mother can no longer collect a wife's benefit, but IF the benefits she has been getting do include wife's benefits, then that fact is relevant to her decisionmaking going forward. If she has been accustomed to getting $X/month based on her filing at age 62 and decides to put off filing for widow's benefit until she is FRA, she needs to know whether that $X is just her own record (and thus can be expected to continue unabated going forward) or whether that $X included some wife's benefits, $Y, which will now disappear, so her checks going forward would be $X-$Y, until such future time (presumably FRA) as she files for widow's benefits.

I can't say enough how much compassion I have for the OP's mom. It is mind-boggling to deal with these kinds of decisions so soon after a husband's passing. I am grateful that I did not need to deal with such decisions so immediately in the aftermath of my husband's death. I was not even eligible to apply for any kind of benefits at the time of his death, since I was still 59 with almost half a year to go until I would reach age 60. And since neither my husband nor I was collecting SS benefits at the time of his death, I was not under any kind of obligation to contact SS immediately. I did eventually call them, a number months later, to file for the $255 death benefit and to confirm my calculations of benefits from the dominant strategies for a widow. I can't begin to imagine what it would have been like to try to deal with dealing with such a complex bureaucracy so soon after a spouse's death.

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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 2:22 pm

Another important question to consider as she makes her decisions. Has she been working, even part-time? If she makes more than about $15K/year, her SS benefit checks prior to FRA will be reduced somewhat. (And this will be true whether she is collecting on own record or widow's benefits, though there may be variations as to degree of future compensating adjustments.)

It may be too soon to make a big decision about working now, but many widows of her age find that work can be a good social outlet and meaningful way to structure their time after the loss of a husband, even if they don't actually need the money. After my grandmother died, she spent some time playing bridge, going on cruises, etc. but eventually decided that working was a good thing for her. She continued working, at least part-time, well into her 80s, and seemed to really enjoy it. It gave her a sense of making valued contributions to the world. She also balanced it with volunteer work she enjoyed. She was an inspiration to me as I thought about what to do with the rest of my life.

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JamesPSullivan
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Re: Social Security benefits for surviving spouse

Post by JamesPSullivan » Thu Aug 14, 2014 6:21 pm

Her total benefit is going to be around $2k with dad's $808 part. She didn't ask for the PIA's as I recommended, so I'm trying to convince her to call back. However, she really doesn't want to deal with it anymore.

One more general question. If my mom and dad earned the same amount through their careers, would there be any widow benefit received? Since the difference of the two benefits would be zero.

sscritic
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Re: Social Security benefits for surviving spouse

Post by sscritic » Thu Aug 14, 2014 6:42 pm

OK, those numbers make more sense. We didn't understand that the $800 was just dad's part (which is the real widow's benefit).

So let's say the PIA's were
Hers = $1600
His = $2400

Her RIB starting at 62 = $1200
Her widow benefit starting 42 months early = 0.83375 (2400) = 2001
The excess widow benefit 2001 - 1200 = 801

She will get $1200 + $801 = $2001
Both benefits calculated and reduced independently; small MBA paid plus excess of larger MBA.
I faked the numbers to show what is going on. I still think she would get more by waiting until 66. That should be $1200 + $1200 = $2400, as his $2400 would not be reduced.

sscritic
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Re: Social Security benefits for surviving spouse

Post by sscritic » Thu Aug 14, 2014 6:47 pm

JamesPSullivan wrote: If my mom and dad earned the same amount through their careers, would there be any widow benefit received? Since the difference of the two benefits would be zero.
Yes, if she started early as herself and waited on the widow. If they both have PIAs of $2400 (and he never started - I made the same assumption in my previous answer), then she would be getting $1800 now but $1800 + $600 = $2400 as a widow at FRA. This is dodecahedron's plan (not that I know that her and her husband's PIA are the same). Edit: Mistake! Sorry. Her plan is to take widow now and wait until 70 to be herself.

Note the rule again:
Both benefits calculated and reduced independently; small MBA paid plus excess of larger MBA.
She would get her own reduced $1800 plus the excess of $600 = $2400 - $1800. The widow $2400 is not reduced as it was not taken before FRA.
Last edited by sscritic on Thu Aug 14, 2014 6:56 pm, edited 1 time in total.

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dodecahedron
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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 6:49 pm

JamesPSullivan wrote:Her total benefit is going to be around $2k with dad's $808 part. She didn't ask for the PIA's as I recommended, so I'm trying to convince her to call back. However, she really doesn't want to deal with it anymore.

One more general question. If my mom and dad earned the same amount through their careers, would there be any widow benefit received? Since the difference of the two benefits would be zero.
To answer your second paragraph question, basically no difference EXCEPT that she started collecting on her own record early, so even though the PIAs at FRA would be the same, she could step up to 100% of his PIA at her FRA after collecting 75% of her PIA for the four years before that.

Alternatively, in that case of equal lifetime earnings records, she would have the option to collect on his record from now until age 70 as a widow while letting her own work record benefits grow to age 70 at which point she could collect 132% of her PIA. (This would require a bit of fancy footwork because she is already collecting on her own record now so she would have somehow rescind that earlier filing, a procedure I am not familiar with.)

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dodecahedron
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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 7:05 pm

JamesPSullivan wrote:Her total benefit is going to be around $2k with dad's $808 part. She didn't ask for the PIA's as I recommended, so I'm trying to convince her to call back. However, she really doesn't want to deal with it anymore.
I can completely understand that she must be feeling overwhelmed at the moment, with your dad's death so recent.

I do agree with sscritic--$2K current benefits with $808 coming from your dad seems much more plausible, and I also agree the gain from waiting until age 66 to collect on widow's benefits almost surely has to be much higher than the $858 figure apparently quoted to her.

Is there any way that you could dig up your father's earnings records and compute his PIA yourself. (There are various online calculators that will do this and if your parents maintained a file somewhere with the annual statements SS used to mail out until just a few years ago, it would have most of what you need. You can get the rest from recent tax returns (checks W-2s and Schedule C/SE if any.)

Also, in terms of how long your mother has to keep her options open: I gather the 42-month figure at this point means it was six months ago that she turned 62 and filed for own-record benefits? So she has a few months before she loses any flexibility on her options, I think.

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dodecahedron
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Re: Social Security benefits for surviving spouse

Post by dodecahedron » Thu Aug 14, 2014 7:16 pm

sscritic wrote:
JamesPSullivan wrote: If my mom and dad earned the same amount through their careers, would there be any widow benefit received? Since the difference of the two benefits would be zero.
Yes, if she started early as herself and waited on the widow. If they both have PIAs of $2400 (and he never started - I made the same assumption in my previous answer), then she would be getting $1800 now but $1800 + $600 = $2400 as a widow at FRA. This is dodecahedron's plan (not that I know that her and her husband's PIA are the same). Edit: Mistake! Sorry. Her plan is to take widow now and wait until 70 to be herself.
Actually, I have not 100% decided so the confusion is understandable. I am 60 and still working now, not collecting any benefits. My husband and I did not have equal work records. I was working part-time for a number of years when kids were young and also his chosen specialty of corporate finance was much higher paid than mine in public finance. (Though the earnings cap on SS wages makes that distinction not all that important in many years.)

Tentatively planning on collecting own record at 62 then widow's benefits at FRA. But depending on what interesting career developments come up, I might wind up wanting to keep on working at sufficiently highly paid levels that it doesn't make sense to collect either benefit until FRA (at which point earned income no longer reduces benefits and also widow's benefit reaches max at that point), and of course my PIA would then grow with my work record over time while his remains unchanged since his death. So I have some time to reassess.

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