Should you take benefits at age 62, full retirement age, age 70, or somewhere in between? The decision is already complicated enough without getting into the details of unique widow benefits. If you are a widow and meet certain criteria, you may be eligible to receive a survivor benefit based on your spouse’s earnings. Fairly straightforward, right?
Not so fast.
Widows also might have their own benefit. A widow could take a survivor benefit and delay taking their own, allowing them to grow each year and possibly result in a larger individual benefit in later years.
For example, if your widow benefits are $1,800 at full retirement age and your own benefit is $1,900, it may make sense to take only widow benefits and allow your own benefit to continue to grow at up to 8% a year until age 70. By 70, your individual benefit could be north of $2,500 assuming a full retirement age of 66. At that point you could switch to your own larger benefit, an increase of over $700 a month.
If you think the Social Security Administration will walk you through these strategies, think again. A report by the Office of the Inspector General released February 14th “found that 82% of current beneficiaries who are dually entitled to survivor benefits and their own retirement benefits would have received a higher monthly benefit amount if SSA had informed them of the option to delay their retirement application until 70.”*
As with anything, you should not take action without speaking to your financial advisor as every unique person needs a unique plan.
*Mary Beth Franklin, Social Security Underpaid 82% of dually entitled widows and widowers – Investment News
**Disclaimer: Reston Wealth Management has provided this information as a service and does not provide legal, accounting or tax advice. The appropriate professionals should be consulted on all legal, accounting and tax matters. Every individual situation is unique and a proper plan should be put in place before making a decision regarding Social Security. The Social Security Administration alone makes all final determinations on your eligibility for benefits and the benefit amounts. You should consult with your local Social Security Office before acting upon any information provided.