By Ariana Ottrando
If you are a widow or widower nearing full retirement age, you are eligible to apply for Social Security survivor’s benefits. If your deceased spouse had worked and paid into the Social Security program, you’re allowed to collect a monthly Social Security survivor payment – the amount of which is based on the work and earnings of your spouse.
Prior to 2015, the claiming strategy referred to as “claim some now, claim more later” served as a way for someone at full retirement age to receive both spousal and retirement benefits, including delayed retirement credits, simultaneously. That has since changed with the passing of the bipartisan budget bill by Congress seven years ago this November, but survivors are still able to claim on more than one account – just at different times.
Kurt Czarnowski of Czarnowski Consulting, a retirement planning firm, stresses that a “key part of the Social Security program is the survivor benefit protection for workers and their families.” Benefits under this program are based on your work record and what you've paid into the system, or that of your deceased spouse if you're a widow or widower. If you or your spouse fit this description, then you're eligible to collect survivor’s benefits as early as the month you turn age 60, although retirement and spousal benefits cannot be paid any earlier than age 62.
Those who have worked and paid into the Social Security program have the option to sequence the collection of payments between survivor and retirement benefits. If you're under full retirement age and want to work at the same time you're receiving Social Security benefits, you'll be subject to an annual earning’s limitation. However, this goes away once you've reached your full retirement age. While you're able to start collecting before full retirement age, you will receive less than if you wait until after full retirement age. Hence, “good things come to those who wait.”
Although factors vary on a case-to-case basis, Czarnowski’s suggested sequence of benefits collection is to receive survivors' benefits first while deferring the collection of retirement payments past your full retirement age. This method allows for those benefits to grow by two-thirds of a percent per month, or 8% per year, and also allows you to optimize lifetime security benefits. It’s important to note that there are no delayed retirement credits with survivor benefits -- which means that there is no additional increase by waiting past full retirement age before starting to collect. This is why it may make sense for someone in a position to receive both benefits to follow the order of survivors first and retirement second.
So, what is the difference between spousal benefits and survivor benefits? In a spousal benefit, both members of the couple are still alive. Based on the highest-earning spouse’s benefit, the other spouse would receive 50% of that benefit at full retirement age. Survivor benefits occur when one spouse has passed away and the surviving spouse receives 100% of what the deceased spouse was receiving or would have been receiving had they begun collecting during the month of death. The law has a widow’s limitation safeguard where the survivor’s payment at their full retirement age can’t fall under 82.5% of their deceased spouse’s full retirement age benefit amount.
How would you go about applying for these benefits? You can apply for spousal and retirement benefits through applications online, and in person for survivor benefits. Proof of marriage, age, and death are required for survivors' benefits.
Czarnowski firmly believes that “Social Security, it’s more than a retirement program. And the survivor benefit program, hugely important part of it and people just need to be aware of the benefits that do accrue you tragically lose a loved one … There are ways that social security can step in and provide the measure of financial security.”
For more on social security, check out Everything You Need to Know About Social Security’s WEP and GPO here.