Maximizing Social Security Survivor Benefits

A reader from the State of Washington asks about the best strategy for maximizing his wife’s Social Security survivor benefits.

“I am interested in finding out when my wife should claim her Social Security benefits. I have the largest retirement benefit by far, and I plan to claim it in July 2024, when I turn 70. She is close to nine years my junior.

I had initially thought she should take her retirement benefit at age 62 to help pay for her health insurance premiums through the ACA until she qualifies for Medicare at 65. Am I correct in saying that if she draws her retirement benefit at 62, she will not be able to draw the largest survivor benefit off my earnings record? If true, should she wait until her Full Retirement Age (FRA) to claim her retirement benefit? Or can she draw on her retirement benefit at 62 until I pass and then claim her survivor benefit? What about spousal support? Does that affect any of these calculations? (Her spousal support will be larger than her retirement benefit.)

I’m confused! We want to help pay for her medical insurance, but we don’t want to sacrifice her survivor benefit. How will she get the largest survivor benefit?”

I wish the Social Security system could be a little more straightforward in its rules for spousal benefits versus survivor benefits (sometimes called widow or widower benefits). There are nuances to the rules that are important in cases such as yours.

A spouse can have eligibility to claim a benefit from your earnings record in two ways. It can come from a spousal benefit (which is available to them while you are still alive) or a survivor benefit (which is available to them after you pass away).

An interrelationship exists between one’s own retirement benefit and a spousal benefit. Using your story, your wife has her retirement benefit but is also dually eligible (or entitled) to a spousal benefit when she becomes of age. If she is eligible for both, she will be forced to claim both and cannot claim one without the other.

You mentioned that your retirement benefit is much more significant than your wife’s, so when she goes to claim, she will be eligible for a spousal benefit that’s larger than her own benefit. However, if you claim this coming July, she won’t be old enough yet to claim because she’s nine years your junior.

When she reaches age 62 and can claim Social Security benefits, she’ll be “deemed” or assumed to be claiming both: her own retirement benefit plus the spousal benefit. She won’t get both in their entirety: the spousal benefit will be limited to the amount that brings her retirement benefit up to the spousal amount. That’s a fancy way of saying that when she claims both, she’ll receive her own benefit, plus a “spousal excess benefit” on top of that if she’s entitled, which it appears she is.

Because her retirement and spousal benefits are interrelated, if she claims one early, it’s going to affect the other. There’s no way to disconnect those two. However, the survivor benefit is totally separate. That is, claiming your retirement or spousal benefit early – and thus experiencing a reduction for claiming either one early – does not directly affect the survivor benefit.

You seem particularly concerned about your wife getting her maximum survivor benefit, which equals the amount you are collecting when you pass away, assuming you live beyond next July when you claim. If you pass away before next July, she’ll receive what she could have received had you claimed the day before you died.

Let’s assume you make it to age 70 next July and successfully claim. At that point, your wife’s survivor benefit becomes that benefit amount if you predecease her.

Her survivor benefit is not affected if she claims her retirement benefit or a spousal benefit early. The only way it would be reduced is if she were to claim the survivor benefit itself earlier than her Full Retirement Age (FRA). From my rough calculations, her FRA for survivor benefits is around 67, or possibly 66 and ten months. (Note that people can have different FRAs for retirement benefits and survivor benefits that are up to two years apart, but I believe your wife’s will both be around age 67.)

If you were to pass away soon after turning 70 and she were to switch directly to your survivor benefit, she would receive less than what you were collecting because she would be younger than her FRA. A reduction would be imposed for claiming before her FRA.

Your wife will collect 100% of what you were collecting before you passed away if you live long enough for her to reach age 67 – when you are around age 76. Alternatively, if you were to pass away before 76, she could delay activating her survivor benefit. She could collect her own retirement benefit until her FRA at age 67, then switch over to the survivor benefit. Those are the two ways she could be sure to receive 100% of what you were collecting as your age 70 benefit.

Still, there’s some good news. If your wife claims her own benefit at age 62 and deems a spousal benefit at the same time, that act will not jeopardize full survivor benefits. I’m not saying she should or shouldn’t – that’s a bigger question for your combined financial situation. I’m simply reinforcing that it’s only if she were to switch to survivor benefit before her FRA that she’d jeopardize the full survivor benefit.

Hopefully, you’ll live to at least age 76, when your wife should reach her FRA. Then, assuming you pass away first, she could switch to the survivor benefit in full upon your passing and not be affected in any way for claiming her own retirement benefit early.

We get so many questions about the early-claiming rules for spousal versus survivor benefits. I’m always happy to answer them because I know it’s confusing, and so many people are unclear.

To summarize, spousal and survivor benefits are separate and distinct. Just because you trigger one doesn’t mean you trigger the other. Also, the survivor benefit is a standalone benefit with its own rules that are unaffected by what you do elsewhere.