Q & A: November 2017

Q & A: November 2017

My Ex Passed Away.  Can I Claim A Widower’s Benefit?

Q:  My ex-wife passed away last year at 62, and recently my job ended.  She had a good job with a pharmaceutical company for about 20 years.  Can I file a claim for widower’s benefits based on her account and still get my own retirement benefit later?  I’ll be 64 in December and I’m looking for new employment.  I have not re-married.

A:  A divorced spouse can receive Social Security benefits on the account of an ex-wife (or husband) just the same as a surviving widower or widow.  To qualify, your marriage must have lasted 10 years or more, and you did not remarry prior to age 60.  You can receive a widower’s benefit while you delay claiming your own retirement benefit to allow it to grow until age 70.  You may claim your own retirement benefit, anytime it is higher than what you receive in survivors benefits up to age 70.

The decision is complicated by significant trade offs that can reduce or even eliminate the money you are hoping to receive.  Here are some factors that you need to consider.

  • Benefit reductions due to your age. —  Since you were born in 1952, your age for receiving full, unreduced Social Security benefits is 66.  That holds true for survivors benefits, as well as for your own retirement benefit.  So assuming you start benefits in December at age 64, the amount you would receive for starting benefits before your full retirement age will be reduced — almost 10%.  (When you start benefits early you get less but you theoretically receive them over a longer period of time.)  But that’s not the only reduction.
  • Benefit reduction due to your ex-wife’s age. — The maximum survivors benefit people can receive is limited to what your ex-spouse would have received if still alive.  In 2016 she would have attained age 63, but her benefit would be reduced because she would not have reached her full retirement age, which is 66.
  • Earnings from work could cause Social Security to withhold your benefits.  Should you be successful in your job search, your earnings could affect what you receive in Social Security benefits.  Social Security will deduct $1 in benefits for every $2 you earn above the annual limit, which is adjusted annually and is $15,720 in 2016.    If for example, you started a job and earn $30,000 in 2017, you would earn $14,280 more than the exempt $15,720.  That means Social Security with withhold about $7,140 in benefits.  If you are receiving a reduced survivors monthly benefit of $675, or $8,100 annually, then you would receive only $960 in benefits for the entire year of 2017.  You would receive no benefits at all for 10 months out of the year.
  • Earnings may cause your Social Security benefits to be subject to taxation.  A portion of your Social Security benefits may be taxable if your income is over certain thresholds —$25,000 and up (individuals) or $32,000 and up (couples filing jointly).

The decision on when to start benefits is not a simple one.  If you have some retirement savings, or equity in a home, it may be to your advantage to delay starting benefits and to use other resources for a few months while you look for other work.  Your local senior center, or colleges or public libraries may also have programs provided by retirement and financial professionals that can help provide you with guidance.  To learn more, download this publication from the Social Security Administration: How Work Affects Your Benefits.