If I Begin Collecting Survivor Benefits Before FRA Will My Rate Include My Husband's DRCs?

Category: 
Jul 11 2020 - 10:16am

Hello Larry,

My dear husband passed away in 2018. He was receiving Social Security which included his Delayed Retirement Credits. I turned 60 in 2020 and understand that if I begin collecting Survivor's Benefits now they will be reduced at 71.5% beginning in 2020 and slowly increase each month until I reach full-retirement age at 67. My questions are: "If I begin collecting Survivors Benefits before my FRA, will the Survivor's Benefits include my late husband's Delayed Retirement Credits or only his PIA? Also, if I elect to begin collecting Survivor's Benefits before FRA but once I turn 67 will I then receive my husband's Delayed Retirement Benefits included in my Survivor's Benefits or not?

I appreciate your help as it's been very difficult finding a clear answer to this question on-line and from my local Social Security Office.

Thank you,
LJC

Hi LJC,

I'm sorry for your loss.

Just to be clear, if you start drawing your widow's benefits effective with the month you reach age 60 your benefit rate will be calculated at 71.5% of your husband's benefit rate inclusive of any delayed retirement credits (DRC) that he earned. If you do start drawing at age 60, though, your widow's rate won't increase except for future cost of living (COLA) increases. Then 28.5% reduction is permanent unless some of your benefits are withheld prior to full retirement age (FRA) due to your earnings.

If you file for your widow's benefits at FRA or later, you'll receive 100% of your husband's benefit rate inclusive of any DRCs he earned. Or, if you start drawing in any month between age 60 and FRA, the percentage reduction applied to your rate would depend on your age at the time you start drawing. And, the closer you are to FRA when you start drawing, the closer you'd get to 100% of your husband's rate. By the way, if you were born in 1960 then even though your FRA for benefits on your own record would be age 67, your FRA for widow's benefits would be age 66 & 8 months.

For example, say Bob died in 2018. Bob's benefit rate including DRCs was $1915 at the time of his death, but with the COLAs that occurred after his death Bob's current monthly rate would be $2000. Bob's widow, Jan, starts drawing widow's benefits when she turns age 60 this year. Jan would then receive $1430, or 71.5% of Bob's full rate. However, if Jan had waited to age 64 to apply she'd have received 88.6% of Bob's full rate, or $1772. And, if Jan waited until FRA to file, she'd get Bob's full rate of $2000.

If you're insured for Social Security benefits on your own record, then your best strategy would likely be one of the following:
1) File for reduced widow's benefits at age 60 or as soon as your earnings will permit at least some benefits to be paid, then switch to 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 benefit when it reaches it's highest potential rate. Our software (https://maximizemysocialsecurity.com/purchase) could help sort all of this out for you so that you can determine the best strategy for maximizing your benefits.

Best, Jerry