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Ask Bob: Will My Self-Employed Spouse Receive My Social Security Survivor Benefit?

A reader's self-employed wife is winding down her business. Will she still receive the survivors benefit? Social Security expert Mike Piper breaks down filing rules.

Question:

I am 67 and my wife is 63. I retired last year and am waiting until I turn 70 to start collecting Social Security. My wife is self-employed and winding down her business. If she elects to start taking her Social Security now, will she still receive my survivor benefit on my death?

Answer:

"A person's benefit as a widow(er) is affected by the age at which they filed for that benefit and the age at which the deceased spouse filed for his/her own retirement benefit," says Mike Piper, a CPA in St. Louis, Missouri, author of nine financial books and publisher of the Oblivious Investor blog.

Therefore, benefits are unaffected by the age at which the surviving spouse filed for their own retirement benefit.

"Yes," Piper says, "the wife could file now (at age 63) for her own retirement benefit, and doing so would not impede her ability to collect a benefit as a surviving spouse, if such becomes applicable."

However, Piper warns that because she's younger than full retirement age, they should be aware of the earnings test, which could be affected by how much she earns from her business. 

From the Social Security Administration on the earnings test:

"The retirement earnings test applies only to people below normal retirement age (NRA). Social Security withholds benefits if your earnings exceed a certain level, called a retirement earnings test exempt amount, and if you are under your NRA. One of two different exempt amounts apply — a lower amount in years before the year you attain NRA and a higher amount in the year you attain NRA. These exempt amounts generally increase annually with increases in the national average wage index."

It is important to note that any benefits withheld while you continue to work are not "lost". Once you reach NRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.

The also reader mentioned that they are currently age 67. If they were born before Jan. 2, 1954 (for example, they'll be turning 68 in Sept-Dec of this year), they would be covered under the "old" set of filing rules, says Piper.  

"That would mean that, after the wife files for her own retirement benefit, the reader could file a restricted application for just a spousal benefit (on the wife's work record) while allowing their own retirement benefit to continue growing until age 70," he says.

Editor Hannah Sammut assisted with this report. 

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Email Robert.Powell@maven.io

Question:

I am 67 and my wife is 63. I retired last year and am waiting until I turn 70 to start collecting Social Security. My wife is self-employed and winding down her business. If she elects to start taking her Social Security now, will she still receive my survivor benefit on my death?

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