Social Security Survivor Benefits - pass before Full Retirement Age

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azianbob
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Social Security Survivor Benefits - pass before Full Retirement Age

Post by azianbob » Mon Jun 29, 2020 12:12 pm

My father in law has recently passed at the age of 61. He was the sole worker (mother in law is a housewife), and they have filed joint tax returns.

My mother in law is 60, and as such would qualify to start taking survivor benefits (although it would only be 71.5%).

I have been reading online but what I cannot find is what she would be getting 71.5% of. Is it my father in law's social security benefit of what he was slated to get at 67 (his full retirement age) so the full projected amount in his SS statements? Or is it the prorated amount he would get if he took benefits at his current age?

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ObliviousInvestor
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by ObliviousInvestor » Mon Jun 29, 2020 12:53 pm

Because he died prior to FRA and prior to having filed, her full survivor benefit would be his PIA (i.e., the amount he would have gotten if he had survived until his FRA and filed on that date).

If she files for survivor benefits prior to her survivor FRA, there will be a reduction, as you have indicated.
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Silk McCue
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by Silk McCue » Mon Jun 29, 2020 2:04 pm

Sorry for your families loss. I certainly hope that there is a way for her to delay until her FRA as she very likely has decades of living ahead of her.

Cheers

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azianbob
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by azianbob » Mon Jun 29, 2020 7:33 pm

Based on my father in law's Jan 2020 Social Security Statement, it says:

full retirement age - $1,228
70 years - $1,580
62 years - $826

So based on this, my understanding is that my mother in law would be getting 71.5% of the $1,228 if she were to start receiving benefits now at age 60. However, if she waits until her full retirement age of 67 then she would be getting the full $1,228 a month. And since it is survivor benefits, my understanding is that there is no benefit of waiting past full retirement age (similar to spousal benefits).

Of course this is not up to date numbers as they filed 2019 taxes in March of this year and have made a little bit more of income in 2020 before he passed. So the final amounts should be a little higher. However I put the latest statement info up for discussion.

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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by niagara_guy » Mon Jun 29, 2020 7:45 pm

I don't have this book in front of me, but it is the authority on social security benefits. I believe it has a whole chapter on survivor benefits.
Get What's Yours: The Secrets to Maxing Out Your Social Security.

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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by ObliviousInvestor » Mon Jun 29, 2020 7:51 pm

azianbob wrote:
Mon Jun 29, 2020 7:33 pm
Based on my father in law's Jan 2020 Social Security Statement, it says:

full retirement age - $1,228
70 years - $1,580
62 years - $826

So based on this, my understanding is that my mother in law would be getting 71.5% of the $1,228 if she were to start receiving benefits now at age 60. However, if she waits until her full retirement age of 67 then she would be getting the full $1,228 a month. And since it is survivor benefits, my understanding is that there is no benefit of waiting past full retirement age (similar to spousal benefits).
Correct on all three assertions.
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by joylesshusband » Mon Jun 29, 2020 8:36 pm

ObliviousInvestor wrote:
Mon Jun 29, 2020 7:51 pm
azianbob wrote:
Mon Jun 29, 2020 7:33 pm
Based on my father in law's Jan 2020 Social Security Statement, it says:

full retirement age - $1,228
70 years - $1,580
62 years - $826

So based on this, my understanding is that my mother in law would be getting 71.5% of the $1,228 if she were to start receiving benefits now at age 60. However, if she waits until her full retirement age of 67 then she would be getting the full $1,228 a month. And since it is survivor benefits, my understanding is that there is no benefit of waiting past full retirement age (similar to spousal benefits).
Correct on all three assertions.
Not so fast.

The JAN'2020 statement shows a _projected_ PIA of $1,228. The amount is based on the usual assumption that the principal would keep working until FRA, making no less than the earnings he got in 2019.
However, the principal's death throws a wrench in the fulfillment of said assumptions, meaning that the actual PIA will likely be less than $1,228. We don't know how much, but the SSA does.
(This actual PIA is easy to calculate based on lifetime's SS-eligible earnings - directly on the SSA web site, or using their AnyPIA, or using Mike Piper's calculator.)
Then the OP could assess what the widow is entitled to, per her choice of commencement.
Retired July 2018 @ age 59. Posting here purely for amusement.

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azianbob
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by azianbob » Tue Jun 30, 2020 2:01 am

So to do the actual PIA calculation I need the father in law's lifetime reported taxable income history and plug it into the social security website? And put $0 for 2020 through his full retirement age?

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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by ObliviousInvestor » Tue Jun 30, 2020 6:09 am

azianbob wrote:
Tue Jun 30, 2020 2:01 am
So to do the actual PIA calculation I need the father in law's lifetime reported taxable income history and plug it into the social security website? And put $0 for 2020 through his full retirement age?
That would be one way to do it. She could also call the SSA and ask what his PIA is.
Mike Piper, author/blogger

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azianbob
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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by azianbob » Tue Jun 30, 2020 10:54 am

I see. Does that mean whatever they calculate his PIA to be today will not change (other than cost of living adjustments)? Since he is deceased, he will not work anymore. The only variable of difference is when my mother in law decides to take the benefit.

For instance, lets say for argument's sake the PIA today is $1,000. So it will stay static, just if my mother in law takes the benefit today, she would get 71.5% of the $1,000 as opposed to waiting until full retirement age of 67 then she would get the full $1,000.

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Re: Social Security Survivor Benefits - pass before Full Retirement Age

Post by Silk McCue » Tue Jun 30, 2020 11:01 am

azianbob wrote:
Tue Jun 30, 2020 10:54 am
I see. Does that mean whatever they calculate his PIA to be today will not change (other than cost of living adjustments)? Since he is deceased, he will not work anymore. The only variable of difference is when my mother in law decides to take the benefit.

For instance, lets say for argument's sake the PIA today is $1,000. So it will stay static, just if my mother in law takes the benefit today, she would get 71.5% of the $1,000 as opposed to waiting until full retirement age of 67 then she would get the full $1,000.
That is correct. His SS benefit is locked at death and SS can tell you what the actual number is. The only thing that will then vary the benefit is your mother's claiming date.

Cheers

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