How Are Reduced Widow(er) Benefits Calculated?

Aug 23 2016 - 8:30am

Dear Larry,

I posted my question at your PBS link yesterday, but found this portal this morning, so I am resubmitting my question here. I hope my double posting doesn't cause you and your team of experts any duplication of time and effort.

My husband is much older and filed years ago, before his full retirement age. His current benefit is 87.2% of his full PIA. I plan to file when I turn 64 this year. I am entitled to benefits on my own work record, but I volunteered during much of my life, so my husband was the larger wage earner. Consequently, my spousal benefit is larger. I understand that my "spousal" benefit is actually the combined worker/spousal benefits, each of which is reduced by different early filing reduction factors. By filing early, I know that I will receive 20% less than filing at my FRA, which I've factored into my decision.

My question concerns what effect, if any, filing this year before my FRA will have on the survivor's benefit in the event my husband predeceases me. Since he filed early, I am subject to the RIB-LIM (widow's limit) rule. I plugged in the numbers specific to our situation using your RIB-LIM equation included in one of your earlier articles. Your formula is: "Widows Benefit = Min (reduction factor times PIA, max (RIB times DRC, .825 times PIA)." The result, in my case, was that at age 64, I am already beyond the age at which I reached my maximum survivor's benefit entitlement, which turned out to be 32 months before my FRA. So, in my case, filing early at 64 for my worker/spousal benefit should result in no further reduction in survivor's benefit beyond the RIM-LIM reduction.

Or, at least we are hoping that that's the case. What concerns us is some confusing and cryptic communication we had with SSA about the effect of filing early for worker/spousal benefits reducing survivor's benefits. We know that early filing would be a factor in situations where the surviving spouse is entitled to the deceased's full PIA, or even in widow(er)'s limit situations where the surviving spouse has not reached the "maximum eligible survivor's benefit" age, but that doesn't seem to apply to us. Are we missing something?

Lastly, for those who file early for their worker/spousal benefits and whose spouses die before the surviving spouses reach their full retirement age, which date is used to determine the reduction to their survivor's benefit ----- the early filing date for their worker/spousal benefits, or the date of their spouses death?

We appreciate any clarity you can provide on this. Thank you for being an invaluable resource!

Hi,

The age reduction for widow(er)'s benefits is based on the widow(er)'s age at the time their spouse dies, not their age at the time they applied for spousal benefits and/or retirement benefits on their own account. They are entirely independent calculations.

Since you are now within 32 months of full retirement age, you would be eligible for your husband's full reduced benefit amount (i.e. 87.2% of his PIA) if he dies before you. That would be the case whether you filed for spousal benefits and/or benefits on your own record at age 62, or 66, or anywhere in between.

Best, Jerry