Welcome to our “Social Security Q&A” series. You ask a question about Social Security, and a guest expert answers it.
You can learn how to ask a question of your own below. And if you would like a personalized report detailing your optimal Social Security claiming strategy, click here. Check it out: It could result in receiving thousands of dollars more in benefits over your lifetime!
Today’s question comes from John:
“A couple of years ago, I purchased a Social Security analysis from an online firm. It showed that my wife could collect widow’s benefits equal to my age 70 benefit, if I wait that long to claim. In other words, her widow’s benefit would include any delayed retirement credits (DRCs) that I earned by delaying claiming my own benefits past my full retirement age (FRA).
However, I recently visited my local Social Security office, where a representative told me that the most my wife could receive is my FRA amount. Delayed retirement credits would not be included in her widow’s benefit, or so he claimed. Which claim is correct?”
More bad advice from Social Security
John, it turns out that you purchased your analysis from my online firm, Social Security Choices. So, I am very familiar with your analysis and the issue you raise.
First, let me note that Social Security Administration (SSA) representatives often give bad advice to applicants. I am contacted at least once a month by a client who was told something by a Social Security representative that conflicted with something in my firm’s report. So far, we have always been correct in our statements and the reps have always been wrong.
John, the Social Security representative you spoke with may have been confused by the different treatment received by spouses versus widows.
A spousal benefit (or a divorced spousal benefit) does not gain from delayed retirement credits. For example, if a husband had an FRA benefit of $2,000, then half of that amount ($1,000) is the maximum benefit a spouse (or ex-spouse) can receive. Even if the husband delays claiming until age 70, her maximum spousal benefit remains at $1,000.
In contrast, if the husband with the $2,000 FRA benefit delays claiming until age 70, his widow qualifies for $2,640 ($2,000 in FRA benefit, plus $640 in delayed retirement credits).
For SSA documentation on this matter, you can go here. See Section 4 in particular. Or, if you really need something to help you sleep, you can check out this from the SSA Program Operations Manual System.
Getting some inexpensive expert advice about claiming issues can save you many thousands of dollars. It certainly has in John’s case.
Had he depended on the Social Security representative, he would have claimed years earlier than initially planned and thereby given up his delayed retirement credits. That loss would have affected his own benefits, plus his wife’s widow’s benefit if she outlives him.
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You also can find all past answers from this series on the “Social Security Q&A” webpage.
I hold a doctorate in economics from the University of Wisconsin and taught economics at the University of Delaware for many years.
Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.