Survivor benefits allow you to substitute the higher benefit of a deceased or former spouse for your own, and offer other financial advantages as well.
The rules covering survivor benefits are many. So, you may want to familiarize yourself with concepts such as full retirement age, the limit on family benefits (in situations where there is more than one survivor) and so-called blackout or gap periods (the periods, if any, after an eligible child reaches 16, but before a surviving spouse is 60).
Are you qualified?
The first thing to do, if you have suffered a loss, is to determine whether you qualify for survivor benefits.
Usually, Social Security survivor benefits are available to you if you are 60 or older, were married for at least 10 years, and didn’t remarry before age 60.
Others may qualify for Social Security survivor benefits too, including unmarried children younger than age 16 and adult children who become disabled before age 22.
Even a parent can receive survivor benefits, provided the parent was getting at least 50% of his or her income from the deceased worker.
Generally with Social Security, delaying when you first take benefits will lead to a higher monthly payout. For example, though survivors can take benefits as early as age 60, there may be financial advantages to waiting until “full retirement age,” which differs based on when you were born. If, however, you’re a disabled surviving spouse, you can begin taking benefits at age 50.
You can look up your full retirement age for survivor benefits on the Social Security website.
The decision of when to file for benefits is highly personal.
We encourage you to review your own situation with a trusted and knowledgeable advisor.
Strategies for claiming Social Security spousal benefits
You may be entitled to benefits based on both your deceased spouse’s Social Security benefits and your own earnings.
For example, you could choose to file for either a survivor benefit starting at age 60 or your own retirement benefit as soon as age 62. And then switch to the benefit of the person with the better earnings record at full retirement age.
You can’t, however, claim both survivor benefits and your own worker benefit simultaneously. Also, your full retirement age for survivor benefits and worker benefits may be different.
Let’s consider two strategies for a 60-year-old widow who is eligible for a $2,500 survivor benefit at full retirement age, as well as a $2,000 worker benefit, also at full retirement age.
Assuming a 2% annual cost of living adjustment for these benefits, here are projected benefit levels for two possible claiming strategies:
BEGIN ANNUAL SURVIVOR BENEFITS AT 60,
THEN SWITCH TO WORKER BENEFITS AT 70
|BEGIN ANNUAL SU RVIVOR BENEFITS STARTING AT AGE 66|
Source: TIAA projections. Note that actual benefits may vary. You are encouraged to consult the Social Security Administration and your own tax advisor.
In the first example, the widow who takes survivor benefits at 60, before switching to taking her own worker benefits at 70, was able to receive Social Security benefits sooner than age 66.
Also, by taking a reduced survivor benefit at 60, and delaying her own worker benefit until age 70, she receives a total of $314,440 over twelve years vs. $213,120 from the option of taking her un-reduced survivor benefit at age 66. Additionally, she will receive a greater worker benefit going forward.
The strategy of beginning to take the lower benefit as soon as you become eligible, and switching to the higher benefit at full retirement age, may not always be optimal.
For instance, if you’re younger than full retirement age, still working and are earning more than $15,720 a year,1 the Social Security Administration will reduce your benefits by $1 for every $2 you earn.
There are other factors, too, that affect the optimal way to structure benefits. You have to understand the rules, do the math, and decide what makes sense for your situation.
Seeking more information on survivor benefits
Survivors can gather information in several ways. The Social Security Administration offers an excellent page of online information for survivors, and it also has local offices and call centers.
At what is usually a difficult time, it may be best to make your decisions with the help of a tax advisor. A TIAA advisor can help with retirement income planning.