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Social Security’s rules for collecting are complicated. Benefits for widows are calculated differently than traditional Retirement Benefits, so there are a few key rules and strategies that you need to be aware of. Below are seven things you need to know about Social Security Survivor Benefits.

#1: Switching

You cannot combine your Survivor Benefits and regular Retirement Benefits, but you can switch between the two in order to maximize the value you receive. Each benefit calculation works differently, which allows you to receive additional benefits by strategically switching at certain ages like 62, full retirement age and 70. Survivor Benefits are available as early as age 60 and reach their maximum value at full retirement age, which is between 66 and 67 depending on when you were born. Retirement Benefits first become available at age 62 and reach their maximum at age 70. In general, it is best to first determine which of your benefits has the highest maximum monthly benefit; this is the benefit that should be deferred. The smaller of the two benefits should be claimed first.

#2: Working

If you are still working and not yet at full retirement age, which is between 66 and 67, Social Security’s Earnings Test may temporarily reduce or eliminate your benefits. In 2020, you can earn up to $18,240 annually free of restrictions, but benefits are phased out after that point. For every $2 of earnings above the limit, $1 of benefits are reduced. Only earned income is included in the Earnings Test; income from pensions, retirement accounts, dividends, interest and other income do not come into play. For example, if you earned $28,240 in 2020, you would be $10,000 over the Earnings Test limitation and would therefore see a $5,000 reduction in your annual benefits.

There is a more favorable Earnings Test calculation that comes into play in the year in which you reach Full Retirement Age. The exempt amount is $48,600 and $1 of benefits are withheld for every $3 of earnings over the exempt amount. For some, it may make sense to come up with a plan to transition into part-time employment in order to avoid the Earnings Test limitations and maximize benefits.

#3: Taxes

There is a complex formula that determines how much, if any, of your Social Security is taxable. Your state may tax your benefits as well. If Social Security is your only source of income, you won’t owe any Federal income taxes. As your income increases, more and more of your benefits become taxable, up to a maximum of 85% taxability. At a minimum, 15% of your Social Security benefits will be tax-free. This sliding scale of taxation can create unforeseen tax liabilities for those with other sources of income, so care should be taken when coordinating your various sources of retirement income.

#4: Agents

A common frustration amongst surviving spouses is that they received little, if any, helpful guidance from the agents at Social Security. A lot of that frustration stems from the fact that those agents are not equipped to provide a comprehensive strategy that will maximize lifetime benefits, which can often cause surviving spouses to miss out on lucrative Switching Strategies. The Office of the Inspector General issued a report that found that more than 11,000 surviving spouses could have received higher benefits had the agents suggested an optimized claiming strategy. Underpaid benefits were estimated to be over $131 million! Educating yourself on your options prior to meeting with Social Security is the best way to ensure you maximize the value of the benefits you are entitled to.

#5: Pensions

For those who receive a pension for work performed outside of the Social Security system, the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) may impact your Survivor Benefits and/or Retirement Benefits. This most typically impacts federal, state and municipal employees along with teachers in certain states (California, Illinois and Texas most notably).

If you receive one of these pensions, the GPO may reduce any Survivor Benefits you are entitled to. The GPO looks at the amount of your “non-covered” pension and multiplies it by 2/3. The result is the amount of the GPO, which is subtracted from your Survivor Benefit. For example, a teacher in California with a $3,000 CalSTRS Teacher’s Pension would be subject to a $2,000 GPO ($3,000 x 2/3). If she was eligible to receive a $2,500 Social Security Survivor Benefit, the GPO would be subtracted from that, leaving her with only a $500 net widow’s benefit.

The WEP does not impact Survivor Benefits, but it may reduce the Retirement Benefits you receive if you have work that was both “covered” and “non-covered” by Social Security. If you have at least 30 years of substantial earnings in “covered” employment, the WEP will not impact you. If you have less than 30 years, the WEP could reduce your retirement benefits by as much at $463 per month in 2019. The Social Security Administration has multiple tools to help you determine the impact of the WEP on your benefits.

#6: Do-Over

Even if you have already claimed one of your benefits, there is usually still an opportunity to alter your claiming strategy. This provides a mechanism to correct any mistakes that were made. Generally, you can repeal your application for benefits within the first 12 months provided you return any payments you’ve received. Often, widows will also have the opportunity to alter their claiming strategy beyond that 12 month point. This can allow you to defer a benefit until the time when it reaches its maximum value. In certain circumstances, you may even be entitled to retroactive benefits.

#7: Marriage

If you are thinking about getting remarried it’s important to understand how your various benefits may be impacted. While getting remarried may entitle you to Spousal Benefits, it could also impact your Survivor Benefits. If you remarry before age 60, your Survivor Benefits will no longer be available. By waiting until after 60 you will preserve those Survivor Benefits for the rest of your life. You would also still be eligible to claim Spousal Benefits as well. In certain circumstances involving multiple marriages, you may be able to choose between three different benefits available to you (Retirement, Survivor and Spousal) and switch between them to maximize their value.

Survivor Benefits Educational Video

If you would like additional information, I’ve created an educational video that explores these planning strategies in greater detail. You can watch it here.


This is intended for educational purposes only and should not be construed as personalized financial or investment advice. Please consult your financial and investment professional(s) regarding your unique situation.

Author Justin D. Smith Financial Advisor

Justin has been involved in the financial services industry since 2005. He earned a bachelor’s degree from the University of Michigan and is a frequent speaker on Victory Lap Retirement and tax-smart retirement planning.

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