My husband is on SSDI and in hospice for Prostate Cancer. He was born in April of 1956 and has been receiving SSDI for approx. 7 years. I am 61, born in June, 1958, and work full time making $53,941
He will most likely die before this year (2020) is over. I work because I carry both of us on health insurance.
My question to you is, how much can I receive from his SSDI once he dies? And for how long? Do I have a limit on what I can earn? If so, I can look at taking a lesser paying job. Currently, with Part A being the only thing on his SSDI, his check that goes into the bank is $2730. I am so confused about all of this and things I should do once he passes. It would mean so much to me if you can help me figure this out. Having to care for him has taken its toll on me and I can hardly think clearly these days. He has no life insurance, but he did take $160k out of 401k to pay off the house last year. What little we have left $210,000, I do not think I can touch until I am older, right? So this is everything I can think of to tell you and hope you can help me decide what to do that is best for me.

Thank you so very much,
Doreen

Hi Doreen,

I'm sorry to hear about your husband's condition.

You couldn't actually be paid any of your husband's Social Security disability (SSDI) benefits, but it sounds like you could qualify for survivor benefits in the event of your husband's death. However, if you continue working, some or all of your benefits may need to be withheld due to Social Security's earnings test until you reach full retirement age (FRA). In 2020, Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $18,240.

To give you an example, let's say that you'll earn $54,240 this year. Social Security would then need to withhold $18000 of your benefits, or $1 for each $2 that your earnings exceed $18,240. So, if your monthly benefit rate was $2000 for example, Social Security would need to withhold your entire benefit payment for 9 months before any benefits could be paid. Social Security does pay a one-time death benefit of $255 to widow's regardless of their earnings, though, so you'd at least want to apply for that benefit if your husband dies.

If you file for survivor benefits at FRA, you would receive 100% of your husband's primary insurance amount (PIA), which is equal to his full SSDI benefit rate. And, there is no limit on how much you can earn and collect benefits once you reach FRA. However, if you claim survivor benefits prior to FRA then your benefit rate will be reduced for age. The amount of reduction depends on your age at the time you start drawing. For example, if you started drawing survivor benefits effective with the month you reach age 62 you'd be eligible for 80.5% of your husband's PIA, or 19.5% less than if you waited until FRA.

It sounds like your best strategy for claiming benefits would likely be one of the following:
1) File for reduced widow's benefits as soon as your earnings will permit at least some benefits to be paid, then switch to drawing Social Security retirement benefits on your own record at age 70; or,
2) File for reduced retirement benefits on your own record at age 62 or as soon as your earnings will permit at least some benefits to be paid, then file for unreduced widow's benefits at full retirement age (FRA).

Normally, you would want to start out drawing the lower benefit first and then switch to the higher record when it reaches it's highest potential rate. Our software (https://maximizemysocialsecurity.com/purchase) could sort all of this out for you and help you determine your optimal filing strategy.

My expertise is limited to Social Security benefits, so I'm unable to answer your question about your 401k withdrawal options.

Best, Jerry