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Today’s question comes from Edward:
“My wife and I are each collecting Social Security based on our own record. If one spouse passes, will the survivor collect the other’s share besides their own share? And hypothetically, for other readers, what happens if one spouse is collecting on the other spouse’s earnings?”
Getting the larger of the 2 Social Security benefits
Edward: The answer to both of your questions is the same. When one spouse passes, the surviving spouse receives the larger of the two benefits. It does not matter whether both spouses are collecting on their own record or one spouse is collecting benefits based on their partner’s record.
A surviving spouse can collect benefits as early as age 60. But if the widow(er)’s benefits are claimed before full retirement age, the benefits will be reduced. The earlier the widow(er)’s benefits are claimed, the greater the reduction. If the benefits are claimed at full retirement age or later, the surviving spouse receives 100% of the higher benefit.
There are important implications that result from this method of determining survivors benefits. First, when deciding when to claim benefits, the higher-earning spouse should recognize that a decision to delay claiming will affect not only his or her own benefits, but also the surviving spouse’s benefits.
Suppose the higher-earning spouse has medical problems that suggest he or she may not live a long time. The first reaction might be to claim benefits now because this person will only receive these benefits for a short period of time. This might be a big mistake if his or her spouse is in good health, because a decision to delay claiming will increase the survivors benefits that the spouse will receive.
You can get an individualized report that will help you understand how all this might affect your family decisions as to when to claim benefits.
In most instances, a surviving spouse will need only 75% of the money that’s needed when both partners are living. However, Social Security survivors benefits will be reduced to between 50% and 66% of the benefits received before the first spouse passes. This will vary depending on the circumstances.
For example, if both spouses have equal benefits, then the loss of one benefit will reduce the overall benefits by 50%. If benefits before the first spouse passes include a primary benefit and a spousal benefit of one-half the primary benefit, the survivors benefit will be equal to the benefit of the primary beneficiary. This means that the overall benefit will fall by one-third, leaving 66% of the original combined benefits. These figures suggest that a surviving spouse will be financially worse off after the first spouse passes.
Depending on your situation in retirement, it is important to plan for these eventualities.
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The questions I’m likeliest to answer are those that will interest other readers. So, it’s better not to ask for super-specific advice that applies only to you.
I hold a doctorate in economics from the University of Pennsylvania and taught economics at the University of Delaware for many years. Presently I am teaching at Gallaudet University.
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.
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