Widowhood is one of the most trying experiences that any of us will ever go through. You’ve lost your rock, your best friend. And now of all times, you’re expected to figure out your situation surrounding Social Security? The prospect of this already difficult situation being complicated by the unpleasant task of planning out your financial future can feel like more than you are willing or able to take on. Unfortunately, though, coming up with a Social Security strategy is one of the most important tasks widows will have to complete in order to set themselves up for a secure and stable financial future.
It’s extremely important to remember as you begin to untangle the Social Security web that no two situations are identical. Your unique situation, history and widowhood journey will dictate which benefits you have available to you, as well as the timeline. While it can be daunting to think about calculating specific survivor benefits, we urge you to try not to get caught up in the numbers. The most important takeaway is that you have options and are not limited to one path.
An intro to widow benefits
To begin with, there are two categories of widows that are eligible for survivor benefits. The first category includes widows who are the surviving spouse of a deceased partner, and the second includes surviving ex-spouses. The surviving ex-spouse category is a little bit more confusing. Eligible widows include women who were married for 10 years or longer, got divorced, and either didn’t remarry or remarried at the age of 60 or later.
Retirement benefits vs. survivor spouse benefits
Survivor spouse benefits are different than retirement benefits, meaning you’ll have to choose which one to take and when, as well as when to switch. While the full retirement age (FRA) for your own benefit and the full retirement age for your survivor benefit (S-FRA) are the same, the two benefits have both similarities and differences. For starters, if you take either your worker or survivor benefit early, you will face reduced benefit amounts. On the other hand, if you hold off on claiming your own retirement benefit until you are 70, you could receive a 24-32% increase, while there is no bonus for waiting past S-FRA to claim survivor benefits.
Social Security strategies
Your ultimate goal when it comes to Social Security is to maximize your benefits, which is why it’s so important to come up with a carefully thought out strategy. As a widow, you will likely have between two and three eligible benefits but you can only claim one at a time.
While you are not able to draw both Social Security worker and survivor benefits at the same time, there are ways for widows to integrate both into their strategy. Although the rules surrounding these integrations are complex, they’re absolutely worthy of understanding. One strategy is to draw your worker benefit at age 62 and switch to a survivor benefit when you reach FRA, while another is to draw the survivor benefit at age 60 and subsequently switch over to your own worker benefit at a later age, such as 70. If you file for benefits prior to FRA and continue working, the Social Security earnings test may limit how much you could receive in benefits.
Understanding your personal situation
Ultimately, when it comes to calculating your Social Security benefits and determining your strategy, it’s paramount to remember that no two situations are exactly alike. Your strategy will be based on several factors that are unique to you, including everything from the ages that you and your husband were when he died to whether or not you had young children. You also have to think about when you claim, the order of benefit options, and the size of both the survivor benefit and your worker benefit.
At WH Cornerstone, we understand the pressure on widows’ shoulders when it comes to Social Security and survivor benefits. As a firm, we specialize in working with widows to rebuild your financial (and personal) life, and design a future you can look forward to.
For more on what widows need to know about Social Security, check out this webinar that we hosted with Social Security expert Marcia Mantell. In the presentation, Marcia walks through a variety of situations unique to widows and lays out the specific steps you’ll need to take before claiming your survivor benefit or your own benefit.