SS Retirement Benefits for Widow with Minor Children

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Zigadenus
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SS Retirement Benefits for Widow with Minor Children

Post by Zigadenus » Mon Jan 08, 2018 7:52 pm

I am 57. My husband died 4 years ago. Our children, who are currently 15 and 17, are collecting SS Survivors' Benefits, which I have put in Trust for them (for college). My husband was not a high earner nor a saver and I was a stay-at-home mom for 9 years until I re-entered the work force 7 years ago. It is my understanding that these survivor benefits will end when my children turn 18, and I'm on my own after that until I reach retirement age. Is this correct?
I am self-employed with a variable income, but overall, I earn a bit more than my husband did, and by the time I am ready to retire, I will have been in the workforce for about as long as he was. What is my best strategy so that I don't leave money on the table? Thank you for your help.

focusedonwhatmatters
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Re: SS Retirement Benefits for Widow with Minor Children

Post by focusedonwhatmatters » Mon Jan 08, 2018 10:12 pm

Fellow widowed mom here...a rather unfortunate club to belong to :(

It sounds like you are not receiving Mother's Benefits. Depending on how much you make, you may be able to.

When your oldest turns 18, if still in high school, s/he will continue receiving benefits until graduation. You will receive a form that has to be filled out by the high school verifying enrollment. At the time your oldest's benefits end, your youngest's benefits will most likely increase, until s/he turns 18 and graduates. The amount of this increase remains a mystery to me...it has to do with a formula for maximum family and individual benefits. In other words, your youngest will not probably not receive the sum of what the two of them were receiving, but will probably receive more than present. So if they are each receiving $1000 now, your youngest may receive $1500. Then yes, that's it until retirement.

If you were married at least 10 years and are unmarried at age 60, I believe you can claim your husband's SS retirement benefit if it is larger than yours. I also think you can claim your own for early retirement, then switch to his at full-retirement age, again assuming his is larger. (Visa-versa if yours is larger - claim his early and yours at full-retirement age). I would check with SS on that to be certain though, or maybe someone else here that is more in the know will have a definitive answer to that.

I hope that helps.

Ruger
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Re: SS Retirement Benefits for Widow with Minor Children

Post by Ruger » Tue Jan 09, 2018 2:22 am

focusedonwhatmatters wrote:
Mon Jan 08, 2018 10:12 pm

If you were married at least 10 years and are unmarried at age 60, I believe you can claim your husband's SS retirement benefit if it is larger than yours. I also think you can claim your own for early retirement, then switch to his at full-retirement age, again assuming his is larger. (Visa-versa if yours is larger - claim his early and yours at full-retirement age). I would check with SS on that to be certain though, or maybe someone else here that is more in the know will have a definitive answer to that.

I hope that helps.

I claim widow's benefits on my husbands account and will switch to my own when I turn 70. I don't know if it works in the reverse though.
Just be aware if you claim at an age before your FRA, you will receive reduced benefits.

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alec
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Re: SS Retirement Benefits for Widow with Minor Children

Post by alec » Tue Jan 09, 2018 8:04 pm

Ruger wrote:
Tue Jan 09, 2018 2:22 am
focusedonwhatmatters wrote:
Mon Jan 08, 2018 10:12 pm

If you were married at least 10 years and are unmarried at age 60, I believe you can claim your husband's SS retirement benefit if it is larger than yours. I also think you can claim your own for early retirement, then switch to his at full-retirement age, again assuming his is larger. (Visa-versa if yours is larger - claim his early and yours at full-retirement age). I would check with SS on that to be certain though, or maybe someone else here that is more in the know will have a definitive answer to that.

I hope that helps.

I claim widow's benefits on my husbands account and will switch to my own when I turn 70. I don't know if it works in the reverse though.
Just be aware if you claim at an age before your FRA, you will receive reduced benefits.
Also, if you're under FRA and earning money through working you may be subject to the earning test.

https://www.ssa.gov/oact/cola/rtea.html
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair

Zigadenus
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Re: SS Retirement Benefits for Widow with Minor Children

Post by Zigadenus » Tue Jan 09, 2018 8:45 pm

focusedonwhatmatters wrote:
Mon Jan 08, 2018 10:12 pm
It sounds like you are not receiving Mother's Benefits. Depending on how much you make, you may be able to.
You are correct. I am not receiving Mother's Benefits. When I first went to the SS office, I was told that I had to choose who would collect Survivor Benefits--either me or my children--so I chose my children.

Thank you everyone for your help. I will look into the earnings test and whether or not I can plan to collect spousal retirement benefits prior to my own (or vice versa).

focusedonwhatmatters
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Re: SS Retirement Benefits for Widow with Minor Children

Post by focusedonwhatmatters » Tue Jan 09, 2018 11:12 pm

Zigadenus wrote:
Tue Jan 09, 2018 8:45 pm
focusedonwhatmatters wrote:
Mon Jan 08, 2018 10:12 pm
It sounds like you are not receiving Mother's Benefits. Depending on how much you make, you may be able to.
You are correct. I am not receiving Mother's Benefits. When I first went to the SS office, I was told that I had to choose who would collect Survivor Benefits--either me or my children--so I chose my children.
Hmm, that doesn't seem right. Kids and the surviving parent can both collect, I believe the amount is just adjusted per person. I seem to recall being told it was best for me and my kids to each collect to optimize the family amount. Although perhaps it was something about if someone were to become disabled. I can't be certain...those early days are all just a blur...

If you are earning more than the maximum allowed through work, then yes, you can't collect the Mother's benefits.

Please post what you learn about collecting early spousal retirement benefits before your own (and visa versa).

Edited to add what I found on the SS website https://www.ssa.gov/planners/survivors/ifyou2.html :

"If you are also eligible for retirement benefits (but haven't applied yet), you have an additional option. You can apply for retirement or survivors benefits now and switch to the other (higher) benefit at a later date."

So, I believe you can take a reduced early benefit for either you or your deceased husband, then switch to the higher benefit at full retirement age.
Last edited by focusedonwhatmatters on Wed Jan 10, 2018 12:49 pm, edited 1 time in total.

pshonore
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Re: SS Retirement Benefits for Widow with Minor Children

Post by pshonore » Wed Jan 10, 2018 8:38 am

I believe all SS benefits (Own, Spousal, Survivor, Mothers, Children etc.) are subject to earnings test if the recipient is not FRA. Don't think survivor benefits for a spouse are available unless a person is 60, or disabled or caring for minor children. There is a family maximum as well.

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dodecahedron
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Re: SS Retirement Benefits for Widow with Minor Children

Post by dodecahedron » Sat Jan 20, 2018 2:23 pm

First of all, I am sorry for the loss of your husband and your children's father. I am sorry the complexities of SS are adding to the challenges you face.

The forum's consulting expert on all matters related to Social Security, sscritic, has offered to provide some useful insights into your situation via backchannel through me. He and I agree that your situation is more complicated than most. The situation of a young working widow with minor children is very complicated and most folks have no experience thinking through it, so sscritic's perspective could be very helpful.

But first, he needs answers to a few questions.
  • the year you were born (age is not enough)
  • Will either of your children turn 18 before graduating from HS?
  • You husband's PIA* (if you are not sure about this, just give us the number for one of your children's monthly benefits and we can multiply it by 4/3 to yield the PIA)
  • Are you earning more than $17,040 per year?
  • If you are earning more than $17,040 per year, at what age do you anticipate retiring from that job
  • Anything you can tell us about your estimated PIA based on your own work record

Zigadenus
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Re: SS Retirement Benefits for Widow with Minor Children

Post by Zigadenus » Sat Jan 20, 2018 4:49 pm

Thank you for your kind words, Dodecahedron. To answer your questions:
dodecahedron wrote:
Sat Jan 20, 2018 2:23 pm

[*]the year you were born (age is not enough)

[*]Will either of your children turn 18 before graduating from HS?

[*]You husband's PIA* (if you are not sure about this, just give us the number for one of your children's monthly benefits and we can multiply it by 4/3 to yield the PIA)

[*]Are you earning more than $17,040 per year?

[*]If you are earning more than $17,040 per year, at what age do you anticipate retiring from that job

[*]Anything you can tell us about your estimated PIA based on your own work record
[/list]
*I was born in 1960.
*My eldest son will turn 18 in December of 2018 during his senior year of high school. Likewise, my younger son will turn 18 in December of 2020 during his senior year of high school.
*I don't know my husband's PIA, but each of my children receives a monthly payment of $922.00 (for 2017).
*Yes, I am earning more than $17,040 per year, but the availability of work is not always stable. I am an independent contractor in the oil & gas industry, but even during the recent downturn when many of my colleagues were unemployed, I was fortunate to scrape by with earnings above $25,000.
*I would like to work as long as possible, perhaps reducing my hours to part-time as I approach 70. I am in good health and expect to reach my 90's.
*I logged into SSA and it says my expected benefit at 67 is $959/month. My work record has been spotty as I was a grad student for 6 years and a stay-at-home mom for 9 years and my reported earnings never exceeded $39,000/yr. Also keep in mind that I expect the next few years will be my highest paid yet, but I don't anticipate my earnings exceeding $60,000.

I appreciate your and sscritic's expertise in this matter. I cannot thank you enough for your offer of help, and I hope this post helps others in my situation.

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dodecahedron
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Re: SS Retirement Benefits for Widow with Minor Children

Post by dodecahedron » Sun Jan 21, 2018 12:14 am

Okay, sscritic is doing some more research but I do have some answers from him.
Zigadenus wrote:
Mon Jan 08, 2018 7:52 pm
It is my understanding that these survivor benefits will end when my children turn 18, and I'm on my own after that until I reach retirement age. Is this correct?
1) Since your sons will still be in their senior year of high school when they turn 18 in Dec 2018 and Dec 2020, respectively, their benefits will continue until they complete twelfth grade, presumably June 2019 for your older son and June 2021 for the younger one.

2) A question you didn't ask, but which later came up above is whether your family benefits might be able to go up if you applied for mother's benefits right now. There are some complications with that so sscritic and I are still working on that. There might be some mother's benefits in 2018, depending on your earnings. But assuming your sons are not disabled, any mother's benefits would cease in December 2018 when your younger one turns 16. And of course, if 2018 turns out to be a great year for your self-employment income, then the earnings test will wipe out mother's benefit anyway. We will defer that for the moment.

3) As for being "on your own after that until you reach retirement age," bear in mind that "retirement age" is a complicated concept for a widow born in 1960. You actually have two different full retirement ages. Your FRA for your own-work-record retirement benefits is age 67. Your FRA for your widow's benefits is 66 years and 8 months. Let's treat each of these separately.
  • At your widow's FRA of 66 years 8 months, you can collect 100% of your husband's PIA, which is their maximized benefit. Waiting past that point won't increase them. You could also claim reduced widow's benefits as early as age 60. (71.5% of your husband's PIA)
  • At your own FRA of age 67, you can collect 100% of your own PIA. You can also wait until age 70 to claim 124% of your PIA. Or you could claim 70% of your own record PIA at age 62.
Noteworthy points:

Filing early for widow's benefits in no way reduces your calculated retirement benefits when you subsequently file for them and vice versa. After you have filed for them both, the amount you collect will equal the higher of the two.

However, an earnings test will apply to ANY benefits you collect of ANY TYPE until the year you turn age 67. After that point, you can earn all you want without hurting your current benefits. Before that year, earnings over $17,040 will reduce your benefits that year by one dollar for every two dollars you earn above that limit. In the year in which you turn 67, there are special transition rules. You can earn up to $45,360 that transition year without hurting your benefits. After you are 67, no matter how much you earn it will not reduce benefits.

So that's a summary of the rules. Since you said you don't want to "leave anything on the table," here's how I would sum up how to do that (assuming you remain in good health and have work that you enjoy) :

Keeping working and building up your earnings record.

At age 66 years and 8 months your widow's benefits will reach their maximum, which is your husband's PIA. Based on your son's benefit check, which is 75% of his father's PIA and SSA's rounding rules, we think your husband's PIA was $1,230 in 2017 dollars. So what you could collect at your widow's FRA is $1,230 (plus appropriate inflation adjustments). File for that benefit once you reach 66 and 8 months. No point in waiting any longer for that one.

At age 70, you might as well file for your own record benefits, which will be 124% of your PIA, whatever that turns out to be and may or may not be greater than your widow's benefit. No matter what, you will always get the higher of the two benefit amounts for the rest of your life. You can keep working if you like and your PIA may still grow past that point.

Here's sscritic's summary in case that's clearer.
sscritic in email wrote:If you wait until the widow's FRA to claim a widow's benefit, you will get your deceased husband's PIA or $1230 today which will be increased by the COLA every year (applied in December, it shows up in the January benefit of someone claiming). Once you get closer to your FRA, you should compare the two benefits, yours as a widow and yours as yourself. Even if your own is less than the widow's benefit, you can claim the widow's benefit at 67 and let your own grow until age 70. Your age 70 benefit will be 124% of your age 67 benefit. Note that only your own benefit gets delayed retirement credits. Your widow's benefit can never be higher than the deceased's PIA if he died before his own FRA (which I assume is the case here). It may be that your widow's benefit will always be higher than your own, in which case you would claim as a widow at 67 and never claim as yourself.
Note: all figures above are quoted in current dollars (2017 or 2018 figures). SS will appropriately adjust them for inflation. Your husband's PIA will only grow based on COLA. Your PIA will grow from COLA and also from any improvements in your AIME (average indexed monthly earnings) record, based on your highest 35 years.

Zigadenus
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Re: SS Retirement Benefits for Widow with Minor Children

Post by Zigadenus » Sun Jan 21, 2018 10:10 am

Wow, thank you for your research and detailed response to my questions. I cannot thank you enough!

TravelforFun
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Re: SS Retirement Benefits for Widow with Minor Children

Post by TravelforFun » Sun Jan 21, 2018 1:57 pm

dodecahedron wrote:
Sun Jan 21, 2018 12:14 am
Okay, sscritic is doing some more research but I do have some answers from him.
Zigadenus wrote:
Mon Jan 08, 2018 7:52 pm
It is my understanding that these survivor benefits will end when my children turn 18, and I'm on my own after that until I reach retirement age. Is this correct?
1) Since your sons will still be in their senior year of high school when they turn 18 in Dec 2018 and Dec 2020, respectively, their benefits will continue until they complete twelfth grade, presumably June 2019 for your older son and June 2021 for the younger one.

2) A question you didn't ask, but which later came up above is whether your family benefits might be able to go up if you applied for mother's benefits right now. There are some complications with that so sscritic and I are still working on that. There might be some mother's benefits in 2018, depending on your earnings. But assuming your sons are not disabled, any mother's benefits would cease in December 2018 when your younger one turns 16. And of course, if 2018 turns out to be a great year for your self-employment income, then the earnings test will wipe out mother's benefit anyway. We will defer that for the moment.

3) As for being "on your own after that until you reach retirement age," bear in mind that "retirement age" is a complicated concept for a widow born in 1960. You actually have two different full retirement ages. Your FRA for your own-work-record retirement benefits is age 67. Your FRA for your widow's benefits is 66 years and 8 months. Let's treat each of these separately.
  • At your widow's FRA of 66 years 8 months, you can collect 100% of your husband's PIA, which is their maximized benefit. Waiting past that point won't increase them. You could also claim reduced widow's benefits as early as age 60. (71.5% of your husband's PIA)
  • At your own FRA of age 67, you can collect 100% of your own PIA. You can also wait until age 70 to claim 124% of your PIA. Or you could claim 70% of your own record PIA at age 62.
Noteworthy points:

Filing early for widow's benefits in no way reduces your calculated retirement benefits when you subsequently file for them and vice versa. After you have filed for them both, the amount you collect will equal the higher of the two.

However, an earnings test will apply to ANY benefits you collect of ANY TYPE until the year you turn age 67. After that point, you can earn all you want without hurting your current benefits. Before that year, earnings over $17,040 will reduce your benefits that year by one dollar for every two dollars you earn above that limit. In the year in which you turn 67, there are special transition rules. You can earn up to $45,360 that transition year without hurting your benefits. After you are 67, no matter how much you earn it will not reduce benefits.

So that's a summary of the rules. Since you said you don't want to "leave anything on the table," here's how I would sum up how to do that (assuming you remain in good health and have work that you enjoy) :

Keeping working and building up your earnings record.

At age 66 years and 8 months your widow's benefits will reach their maximum, which is your husband's PIA. Based on your son's benefit check, which is 75% of his father's PIA and SSA's rounding rules, we think your husband's PIA was $1,230 in 2017 dollars. So what you could collect at your widow's FRA is $1,230 (plus appropriate inflation adjustments). File for that benefit once you reach 66 and 8 months. No point in waiting any longer for that one.

At age 70, you might as well file for your own record benefits, which will be 124% of your PIA, whatever that turns out to be and may or may not be greater than your widow's benefit. No matter what, you will always get the higher of the two benefit amounts for the rest of your life. You can keep working if you like and your PIA may still grow past that point.

Here's sscritic's summary in case that's clearer.
sscritic in email wrote:If you wait until the widow's FRA to claim a widow's benefit, you will get your deceased husband's PIA or $1230 today which will be increased by the COLA every year (applied in December, it shows up in the January benefit of someone claiming). Once you get closer to your FRA, you should compare the two benefits, yours as a widow and yours as yourself. Even if your own is less than the widow's benefit, you can claim the widow's benefit at 67 and let your own grow until age 70. Your age 70 benefit will be 124% of your age 67 benefit. Note that only your own benefit gets delayed retirement credits. Your widow's benefit can never be higher than the deceased's PIA if he died before his own FRA (which I assume is the case here). It may be that your widow's benefit will always be higher than your own, in which case you would claim as a widow at 67 and never claim as yourself.
Note: all figures above are quoted in current dollars (2017 or 2018 figures). SS will appropriately adjust them for inflation. Your husband's PIA will only grow based on COLA. Your PIA will grow from COLA and also from any improvements in your AIME (average indexed monthly earnings) record, based on your highest 35 years.
This is why I miss sscritic on this forum.

TravelforFun

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Epsilon Delta
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Re: SS Retirement Benefits for Widow with Minor Children

Post by Epsilon Delta » Sun Jan 21, 2018 2:53 pm

dodecahedron wrote:
Sun Jan 21, 2018 12:14 am

Filing early for widow's benefits in no way reduces your calculated retirement benefits when you subsequently file for them and vice versa. After you have filed for them both, the amount you collect will equal the higher of the two.
sscritic in email wrote:It may be that your widow's benefit will always be higher than your own, in which case you would claim as a widow at 67 and never claim as yourself.
If you retire (stop earning enough to eliminate SS payments based on the earnings test) before FRA (which ever one applies) it usually makes sense to claim the lower benefit early. If 124% of your own PIA will be less than your husbands PIA then claim your own benefit for a short time and claim widows benefit at widow's FRA. Otherwise consider claiming widow's benefit early and claim your own at age 70.

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Re: SS Retirement Benefits for Widow with Minor Children

Post by vested1 » Sun Jan 21, 2018 2:54 pm

TravelforFun wrote:
Sun Jan 21, 2018 1:57 pm

This is why I miss sscritic on this forum.

TravelforFun
We all miss sscritic, but occasionally get private messages when we give bad advice.

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dodecahedron
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Re: SS Retirement Benefits for Widow with Minor Children

Post by dodecahedron » Sun Jan 21, 2018 9:04 pm

Epsilon Delta wrote:
Sun Jan 21, 2018 2:53 pm
dodecahedron wrote:
Sun Jan 21, 2018 12:14 am

Filing early for widow's benefits in no way reduces your calculated retirement benefits when you subsequently file for them and vice versa. After you have filed for them both, the amount you collect will equal the higher of the two.
sscritic in email wrote:It may be that your widow's benefit will always be higher than your own, in which case you would claim as a widow at 67 and never claim as yourself.
If you retire (stop earning enough to eliminate SS payments based on the earnings test) before FRA (which ever one applies) it usually makes sense to claim the lower benefit early. If 124% of your own PIA will be less than your husbands PIA then claim your own benefit for a short time and claim widows benefit at widow's FRA. Otherwise consider claiming widow's benefit early and claim your own at age 70.
Yes, I agree with this addendum. I did not want to write too many contingencies into my message above, but if, for example, you reach a point where you think your earnings are unlikely to exceed the earnings test, you might as well claim the lower of the two benefits immediately and defer the other until it maximizes. I am doing exactly that myself. Zigadenus, I know you are facing lots of uncertainty ahead as far as your industry, the economy overall, etc. Feel free to update situation as it evolves in the future. You can do that privately by PM (private message to me) or just by posting a message on this forum, whichever is more comfortable.

On the issue of whether it is worth filing for mother's benefits for 2018, sscritic and I are still talking that through. You might get a small increase in your family's monthly check total, but it is subject to two interacting effects, one an earnings test DEDUCTION for your earnings over $17,040 and the other a family maximum benefit REDUCTION to the extent your son's checks and your check total more than allowed. A further wrinkle is that although your family benefit total might go up a little, your son's benefits are presumably not subject to income taxes at all (assuming they have little or no income aside from SS) while any checks for mother's benefits to you would be subject to federal income tax. It would be helpful to have estimates of your minimum and maximum range of earned income from your business in 2018. Feel free to send that to me by PM if you prefer.

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