I am a 63 year old widow, still working as a librarian. My husband died in his forties, but his income was much greater than mine so his social security benefit would be much higher than mine. I have been told by a financial person that I should work as long as possible and delay drawing any social security until age 70. I have seen other widows who are drawing survivor's benefits from their husband's accounts with plans to draw on their own accounts at full retirement age, but that is different for me as my own account is smaller. I enjoy working so would like to continue for a few more years, but should I apply for something now or wait as I have been advised. Thanks, Cathy

Dear Cathy,

I hope you aren't paying your financial person for such bad advice. It could well cost you over $100,000! There are four elements at play here. First, your husband earned more, but your widows benefit may still be less than your retirement benefit due to the differences in earnings indexation factors involved here. Second, you may be earning enough to lose some or all your benefits due to the earnings test, which applies until you reach 66. Third, your own maximum age of life comes into play. Fourth, there is the major actuarial increases from waiting till 66 to collect your widows benefit and till 70 to collect your own retirement benefit.

My guess is that you should take your retirement benefit now and your widows benefit at 66. But it could be best to take your widows benefit now and your retirement benefit at 70. If the earnings test really is biting, you may be working for very little relative to just retiring or working part time and not losing benefits due to the earnings test. I.e., you may be in a very high marginal tax bracket due to the earnings test.

Please run our software. It will suggest exactly the strategy to maximize your lifetime benefits taking full account of the earnings test.

All best, Larry