What Are The Two Ways That WIdow's Benefits Are Sometimes Calculated?

Jun 27 2019 - 10:04am

I am currently reading your book 'Get what's yours'. Two questions:

1. You mention that if spouse dies before the age of 62, surviving spouse benefits are calculated two ways and higher of the two is given.
What are the two ways this is calculated?

2. Is the withdrawal period for surviving spouse benefits also at 12 months? If I get a job, I can return the benefits received and treat as though never applied. Do I have 12 months to make this decision?.. and from date of application or from date of benefit being paid?

Thank you so much but I just cannot find any other source of reliable information so sorry to bother you. I would greatly appreciate your insights


The actual benefit computation formulas are too complex for me to fully explain here, but the basic difference in the 2 formulas used to calculate widow's benefits when the worker dies prior to age 62 is the indexing year used. Social Security calculates widow's benefits based on an average of the deceased worker's highest years of wage indexed earnings. The number of years used in the average depends on the worker's age at the time of death.

The wage indexing process converts the worker's annual earnings in each year based on a comparison of the average wage amount in the indexing year vs. the year that the worker had wages. For example, if average wages in the indexing year were twice as much as they were in a year that the worker had earnings, the worker would receive credit for twice as much as his or her actual earnings in the year in question. If the worker dies prior to age 62, his or her earnings would normally be indexed using the calendar year 2 years prior to the year of death when calculating survivor benefits. But, an alternate formula can be used in the case of widow's benefits which indexes the worker's earnings based on the year that the widow reaches age 60. The alternate formula is referred to as WINDEX, and it sometimes yields a higher benefit than under the normal computation formula (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300615302).

Our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to calculate widow's benefit using both of the formulas described above. You should strongly consider using the software to get an accurate calculation of your benefit rates and to compare all of your various filing options so that you can choose the benefit claiming strategy that would be most advantageous in your case.

The answer to your second question is no. The 12 month limit for filing a request for withdrawal applies to Social Security retirement benefits, not survivor benefits. So, you could potentially withdraw an application for survivor benefits more than 12 months after you started drawing them as long as you repay all of the benefits received.

Best, Jerry