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Question about planning wife's SS benefits

Forum|Forum|1 year ago
January 27, 2025
21 replies
6246 views

I have seen contradictory information about this question online and don't find anything on the SSA website that addresses it.

I am 75, the high wage-earner, and started collecting my benefits at age 70. My wife is young and will have only a small benefit on her own earnings. Assuming I am still alive when she reaches age 62, she will apply for her benefits of which the spousal benefit will be higher than her own. So, the SSA will automatically give her the spousal benefit. Now, I very much want her to wait until her FRA of 67 before she starts collecting the widow's benefit so that she gets all of my delayed retirement credits. However, some info sources claim that upon my death the SSA will automatically switch her to her survivor's, since there will be no more spousal benefit. I however want her to wait until her FRA, which would mean that when she loses the spousal benefit she would revert to her own retirement benefit to preserve the option to delay the widow's benefit.

So, the question is, after my death, can she delay the survivor's benefit or will she be forced to take it immediately resulting in a lifelong reduction?

This topic has been closed for replies.

WebWiseWoman

Community Champion ⭐⭐⭐

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HaroldB930596Author

Contributor ⭐⭐

What are you on about?

fffred

Conversationalist ⭐⭐⭐

@HaroldB930596 I am in a similar situation. My wife is 11 years younger than me. I drew my SS at age 70, for the purpose of leaving my wife a larger widow's benefit should I predecease her. We plan for her to draw spousal benefits at age 62 in order to have a larger cash flow while we were young enough to make use of it. She has no work history in the US so she will have no other SS benefit (she is a Canadian citizen and did not work in the US). I have studied this issue a lot; I did not want to leave a destitute widow!

Pertinent points are:

* my wife's spousal benefit will be reduced when she takes at age 62, 5 years prior to her FRA of 67.

* Widow's benefit will also be reduced (by different factors than for spousal) if taken before FRA

* However, the "taken before FRA" is based on the spouse's/widow's age at the time of the primary insured's (me) death. So my wife takes reduced spousal at 62, if I can hold on until she's 66 she will get a reduced widow's benefit because she'd be younger than her FRA, but the reduction is based on only 12 months prior to her FRA, not the full 60 months as her spousal benefit reduction would be based on.

* If I hold on until she is at her FRA she will not be subject to any reduction in her benefit

* Widows are entitled to a benefit that includes consideration of the Delayed Retirement Credits that the primary insured (me) had earned. But spouses' benefits do not include any DRC's

* Widows who have a SS benefit based on their own work history may indeed postpone their survivor's benefit until a later age (or even take the survivor benefit and let their own benefit lie fallow until a later date). There is a specific SSA form for this, though I can't think of it at the moment. I know that I have discussed/mentioned this form on this forum in the past. Some widows/widowers might find this tactic to be advantageous. But if the widow does not have a benefit on their own work record then this technique is not permitted, the SSA automatically converts the spousal benefit to the widow's benefit (this is my wife's situation, so I made certain to study this carefully).

This recent thread discussed some of these same issues, you may find it helpful: https://community.aarp.org/t5/Social-Security/Unsure-when-to-start-drawing-SS-benefit/td-p/2587213

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HaroldB930596Author

Contributor ⭐⭐

I understand all the provisions you have mentioned, but an important question remains. Some explanations report that the widow has to apply for the widow's benefit. (One of the links to the SSA in the thread you recommended implies this, but does not state it plainly.) Other accounts claim that when if the wife is receiving spousal benefits when the husband dies the SSA will automatically stop her spousal benefit and start her widow's benefit without her having to apply. This feature would be similar in principle to the wife applying for benefits while husband is still alive in which case the SSA would automatically give her spousal benefits if greater than her own worker's benefits.

So, it appears that there may be a risk that if my wife applies for benefits while I am still alive, receives the spousal benefit, but then I die before she reaches her FRA, then she would receive a permanently reduced widow's benefit for life. That's the outcome I am trying to avoid. If that risk is real, then it might be better for her not to apply for any benefits until her FRA even if I am still alive.

Another question. The explanations I read say that the widow who has reached her FRA will receive the husband's primary benefit at his FRA plus any DRCs he has earned. That implies, but does not state, that her widow's benefit will be less than her husband's benefit at death, because it will not include the COLAs he has received since his initial claim. Is that the case?

fffred

Conversationalist ⭐⭐⭐

@HaroldB930596

That's awesome, sounds like you have a good handle on this issue.

Whether or not the widow/widower has to apply for survivor benefits depends on if they were receiving spousal benefits already. If they were receiving spousal, then the change to widow's benefit may be automatic. If the survivor was receiving no benefit or only their own benefit then they can elect to take the survivor's benefit now, or postpone until a later date. (related to this point is that SS beneficiary applications now are considered to be "deemed", if an applicant is married and has their own work record then applying for their own benefit "deems" them to have filed for spousal as well, and vice versa.) I believe that if a spouse is receiving a combo of their own benefit as well as spousal (this would occur because of the "deemed" nature and if the spousal benefit is greater than their own benefit) they can elect to postpone the survivor's benefit until a later date...such as when they might be at their FRA, so their benefit wouldn't be reduced. Of course, in this situation they make have a lower cash flow for several years...between the time of their spouse's death and their own FRA...so up to maybe 6 years or so max.

There is an "election form" that the survivor will (can/should submit), Form SSA-4111 (https://www.ssa.gov/forms/ssa-4111.pdf). I suggest studying this election form and instructions. Your spouse/widow may be able to postpone survivor's benefits. My own wife/widow will not be able to do so because she will not have a benefit based on her own record.

You may find this Forbes article by Professor Larry Kotlikoff to be a useful reference about this issue and Form SSA-4111, see https://www.forbes.com/sites/kotlikoff/2016/03/21/social-security-qa-how-many-other-widows-are-they-abusing-like-this/

The SS Handbook provides a few pages that address this issue, see https://www.ssa.gov/OP_Home/handbook/hbkindex-W.html, especially pages https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0405.html and https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0407.html, and probably some others.

On your other question, "yes, all of the intervening COLAs are included in your widow's benefit"

roachme

Contributor ⭐⭐⭐

Short answer is, if you die before her FRA, SSA will cancel the spousal and start the survivor benefit automatically because she is getting spousal. However, she can call them right away and cancel the survivor benefit from starting and revert to her own benefit until her FRA and then start the survivor benefit.

She may have to submit a written statement to SSA to the affect that she wishes to stop the spousal benefit and decline the widow benefits until a later time. The local SSA office should provide guidance.

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Tonster521

Community Champion ⭐

@HaroldB930596 You are correct. If your spouse applies at age 62, she will receive the higher of the two amounts, with her own Worker Benefit being paid first and then any additional amount needed to reach the higher Spousal Benefit being added on. It is a combined benefit. So, she will need to elect Survivor Benefits and file a Certificate of Election if you die before she attains age 67 (FRA).Take a look at my reply to fffred regarding the reduction factors for Survivor Benefits which are significantly less than the reduction factors for Worker Benefits and Spousal Benefits.

fffred

Conversationalist ⭐⭐⭐

Further in my own case, I extended my term life insurance policy by 10 years so that it expires a month or so prior to my wife's 62 birthday. Again, this was because I didn't want to leave a poor widow.

Of course, widow's benefits can begin at her age 60. We are beyond that point now but it was reasonably convenient at the time to take out a 10 year term policy. My wife should be well set for the long term but the cash injection should I predecease her should be useful while other things get sorted out.

For someone in a similar position as for me or the OP, a term life policy could be useful to fill any gaps.

(which reminds me that at the time I was investigating this issue in-depth around 15 years ago I found that the risk for my wife was me dying early, rather than living a long life and spending all her inheritance. The risk for her being that she could be too young for any SS benefits and not have any cash flow coming in. That was my rationale for the term life policy. And we are beyond that risk pothole.)

GailL1

Community Champion ⭐⭐⭐

@fffred

The life insurance extension is a good plan for coverage for her.

IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna

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