RE: Benefits not paid due to earning over the limit.
I am a little confused as to what happens if social security benefits are withheld if we are still working and earn over the limit. Here is my scenario: My benefit rate is much higher than what my deceased spouse was collecting in disability. If I file for widow's benefits on their record when I reach 60, and none of the benefits are paid because I earn over the yearly limit, what will happen when I reach my full retirement age (67 years old). Will I receive a reduced amount because I filed at age 60? Or, since nothing was paid, will it be as if I had filed for widow's benefits at my full retirement age? Will claiming widow's benefits affect my filing for my own social security payment when I reach 70? Thank you for all of your responses on this website. It is very enlightening!
No. If you file for reduced widow's benefits at age 60 and you don't end up receiving any benefits until you reach full retirement age (FRA) due to Social Security's earnings test your benefit rate will be reset to the full unreduced rate effective at FRA. Or, if you just receive some but not all of your benefits due to your earnings between age 60 and FRA your benefit rate would be adjusted accordingly at FRA to only assess a reduction for the number of months for which you were actually paid. It take a while after a person's FRA for Social Security to actually get around to doing those types of recalculations, though. However, Social Security pays any back pay to which the person is entitled once the recalculation is completed.
Filing for reduced widow's benefit won't have any adverse effect on your own Social Security retirement benefits. If you're sure that your own Social Security retirement benefit rate at age 70 would be higher than your unreduced widow's rate, then your likely best filing strategy would be to file for reduced widow's benefits at age 60 or as soon as your earnings will allow at least some benefits to be paid, then switch to your own record at age 70. Our software could sort all of this out for you and help you determine your optimal filing strategy.