I am being told by social security that applying for benefit of combination of my retirement and spousal (since I don't have enough on my own record) before FRA does reduce future survivor benefits. Two different people told me this yet you say no. Has there been a change in the law?
No, the laws regarding the calculation of survivor benefits haven't changed, and it sounds like what you've been told is incorrect. If you qualify for survivor benefits as a widow(er) or surviving divorced spouse, your benefit rate is calculated based on your age at the time you start drawing the survivor benefit regardless of whether or not you previously filed for reduced retirement and/or spousal benefits. Therefore, as long as you are at least full retirement age (FRA) when you start drawing survivor benefits, your rate will not be reduced for age even if you previously received reduced benefits.
For example, say Bob has a primary insurance amount (PIA), which is the equivalent of his full retirement age rate, of $2000 and he files for benefits at his FRA. Bob's wife Mary is age 62 when he files, and her PIA is $500. If Mary files for benefits at age 62, her retirement benefit rate would be reduced to roughly $370. Mary would also qualify for an excess spousal benefit which would be calculated by subtracting her PIA from 50% of Bob's PIA, and then reducing the result for age. In Mary's case, that results in an excess spousal rate of $345 (i.e. ($2000/2 - $500) x .69). Thus, Mary's combined reduced benefit rate adds up to $715.
Five years later after Mary has reached FRA, Bob dies. Mary's widow's rate would be calculated by subtracting her reduced retirement rate of $370 from Bob's benefit rate of $2000. The resulting rate of $1630 would be paid to Mary in addition to her own reduced rate of $370 for a combined rate equal to Bob's full benefit rate of $2000. If Mary had waited until her FRA to start drawing her own retirement benefits her widow's rate would be calculated by subtracting her unreduced benefit rate of $500 from Bob's rate, still resulting in a combined rate equal to Bob's full rate of $2000 (i.e. $500 + $1500).
Before filing, you may want to strongly consider using our software to compare your filing options so that you can choose the best possible strategy for claiming your benefits.