Ask Bob: What's the best age for a married couple to start their Social Security benefits?

Friends were talking about their retirement plans and the question was raised of when a married couple should start their Social Security benefits in order to maximize income while they're living and when one partner dies. Social Security expert David Cechanowicz explains the details of making this decision.
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Question

I wonder if you could shed light on a question that came up recently in a discussion with friends. A married couple is determining the age to take Social Security benefits. The wife wants to take her reduced benefits at 62. Her husband (who made much more than her) dies at 65 before his full benefit date of 67. What benefits will she be eligible for if she waits until his full benefit date to revert to his benefits? Are these benefits reduced or full?

Answer

At first this seems like a simple issue, says David Cechanowicz, senior financial planner with RedWWealth, LLC., but buried in this question are some tricky Social Security claiming rules that individuals should know about. “First, I would like to address the larger issues and then step through the rules.”

Some things are known from this question and some things are going to have to be assumed. Cechanowicz says, “We know that there is a high wage earner lower wage earner. We don’t know if they are the same age today, or if there is an age difference between them. What matters is that we know that this is a household with two wage earners and there are three potential claims for Social Security benefits being discussed. Two of the benefits are retirement benefits, and one is for survivor benefits.”

He continues, “Generally, in a dual income household, it makes the most long-term economic sense for a younger, lower paid individual to claim his or her Social Security retirement benefits early. In most dual-income households the higher paid worker is older and has a greater probability of dying first, allowing a younger “survivor” beneficiary eligible to claim the higher paid worker’s survivor benefit.”

In this scenario, the higher paid worker dies prior to his full retirement age. When that happens, the surviving spouse becomes eligible for “survivor” benefits. “These are the rules she will have to navigate,” Cechanowicz notes.

Survivor benefits are not subject to the rules of “deeming.” “Deeming is the rule that says you must file for all the benefits you are eligible for and claim the highest one. It involves all claimants born after January 1, 1954,” he explains.

Without deeming, the survivor can either file for or continue to collect her own retirement benefits until it would be financially advantageous to switch to the survivor benefit.

“When someone dies prior to receiving benefits,” says Cechanowicz, “the maximum or full survivor benefit is the amount they would have claimed, had they lived to their full retirement age.”

Survivors can claim reduced benefits at age 60 (or age 50 if they are disabled). Survivor benefits are reduced based on the age the survivor claims and reaches the maximum benefit when a survivor reaches their own full retirement age.

The full retirement age for survivor benefits can be the same as, or different from the benefit age for a retirement benefit. Full retirement age is often shortened to FRA, but most people have never heard of the other, FSRA, which designates full survivor retirement age.

“In this case, the survivor has a full retirement age of 67,” he says. “If desired, she could delay her benefit for up to three more years (to age 70) and collect delayed retirement benefits.”

Since she was born in 1960, her full survivor retirement age is actually earlier, at age 66 and 8 months. This is the age when her survivor benefits reach their maximum.

Survivor benefits cannot be delayed past the full survivor age for additional benefits.

“Survivor benefits can be claimed by this widow if she were to remarry as long as she marries after age 60,” he notes, adding “Marriage after age 60 is not counted against the claimant.”

If she were to have been married for at least 10 years, and is at least 62 years old and not remarried, she would still be eligible to collect survivor benefits based on the work record of her ex-spouse.

“So, in conclusion,” says Cechanowicz, “the short answer for this question would be for the lower paid worker to file at age 62 and wait to switch to a survivor benefit at the FSRA. If possible, she should collect on her own benefit until age 66 and 8 months. By waiting, she will gain the maximum benefit for the rest of her life. As always, other financial or health issues may force a decision to elect prior to FSRA.

The host of rules that surround claiming Social Security retirement and survivor benefits can be difficult to navigate. “When individuals run into these situations they need to sit down and consult with someone who has a solid understanding of how these rules work and integrate with their other retirement income,” recommends Cechanowicz.

Got questions? Get answers!

Email Robert.Powell@maven.io

Question

I wonder if you could shed light on a question that came up recently in a discussion with friends. A married couple is determining the age to take Social Security benefits. The wife wants to take her reduced benefits at 62. Her husband (who made much more than her) dies at 65 before his full benefit date of 67. What benefits will she be eligible for if she waits until his full benefit date to revert to his benefits? Are these benefits reduced or full?

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