Should I Apply For My Survivor Benefits Now?

Sep 9 2018 - 9:03pm

Hope you can help. I'm 63.5 years old, plan to wait until 70 before claiming my own SS benefit (>$3k/mo at that age). My 1st wife of 35 years died 3 years ago at age 63. I re-married, and fill all the criteria for SS survivor bene's from my 1st wife (about $1k p/mo). I'm also self employed and not certain what my income for the next 3 years (until FRA) will be. Likely it will be somewhat above the $17,040 earnings test, perhaps even enough to wipe out the full survivor bene (> $ 44k/year) if I apply now. I don't need the cash now, but want to get what's due in a logical fashion. Applying for the survivor bene at my FRA is a no-brainer as the earnings test goes away. Should I apply for the survivor bene now and just see how my self employed earnings go (perhaps yielding nothing until I'm at FRA)? or should I apply for survivor bene now, then suspend it right away, perhaps waiting until my income picture becomes clearer? I realize that filing now will realize a reduced survivor bene (89% of the full $1k p/mo) IF I am under the $ 17,040 earnings test.
Thanks very much if you can shed any light on this.
Rick

Hi Rick,

I'm sorry for your loss.

If you knew for sure that your net self-employment earnings would be too high to permit payment of any widower's benefits prior to your full retirement age (FRA), then there would be no reason to apply for benefits until you reach FRA. However, if there's any possibility that your net earnings will be low enough to permit the payment of even a small amount of widower's benefits prior to FRA, then it would probably be advantageous for you to file for the widower's benefits as soon your earnings would permit at least some benefits to be paid. The reason for that is that since you will be switching to your own record at age 70, you'll want to draw as much as you can in widower's benefits prior to age 70, even if that involves drawing a reduced widower's rate.

For example, say Jim is eligible for an unreduced monthly widower's benefit of $1000 at FRA. If Jim files for his widower's benefits at age 63 & 1/2, his benefit rate would be reduced to $881. However, let's say that due to Jim's earnings the Social Security earnings test (https://www.ssa.gov/planners/retire/whileworking.html) would only permit him to draw benefits for a total of 5 months prior to reaching his FRA. That would amount to a total of $4405 (i.e. 5 x $881) that Jim would be paid prior to reaching FRA. Effective with the month that Jim reaches FRA, his benefit rate would then be adjusted to $980 to reflect the fact that he only drew 5 months of reduced widower's benefits as opposed to the 30 months of benefits that he would have received if his earnings had not exceeded the earnings test exempt amounts.

Therefore, in our example above, if Jim had waited until his FRA of 66 to file for widower's benefits and drew $1000 monthly for 4 years he'd have received a total of $48,000 in widower's benefits prior to switching to his own record at age 70. However, if he had filed for reduced benefits he would have received a total of $51,445 (i.e. $980 x 48 + $4405) prior to reaching age 70.

What's problematic if you don't know how much you'll be earning is that there is no retroactivity permitted when you apply for reduced benefits. Therefore, if you don't file for benefits and it turns out at the end of the year that your earnings would have been low enough to permit payment of some widower's benefits, you couldn't go back and claim those benefits retroactively. Our maximization software would permit you to run various what-if scenarios based on your expected net earnings, which should enable you to determine the most advantageous month to claim your widower's benefits.

Best, Jerry