Why the merry widow is so merry

S

eniors involved in later-life romances sometimes choose to live together rather than remarry, in order to preserve pension benefits of a previous spouse or to avoid becoming responsible for the debts of their new partner, including long-term-care costs.

But cohabitating simply to maintain Social Security benefits of a deceased mate — or even a departed ex-spouse — is unnecessary in most cases.

Surviving spouses can collect benefits as early as 60, or 50 if they are disabled, but the amount will be reduced substantially compared with collecting survivor benefits at full retirement age.

The same rules apply to divorced spouses who were married at least 10 years. In most cases, they aren’t entitled to spousal or survivor benefits of an ex if they remarry.

AN EXCEPTION

But there is an exception for those who wait until 60 or later to remarry, and it is fascinating.

At 66, the full retirement age for survivor benefits for those born between 1945 and 1956 (which are slightly different birth years than those for full retirement benefits), a surviving spouse or ex-spouse is entitled to 100% of what the deceased worker collected or was eligible to collect at the time of his or her death.

But if a widow or widower collects survivor benefits as soon as possible at 60, the benefit is reduced to 71.5% and the survivor is subject to the earnings cap if he or she continues to work while collecting survivor benefits. If eligible, a survivor can switch to his or her own retirement benefits any time between 62 and 70.

Generally, a divorced spouse loses benefits of an ex-husband or ex-wife upon remarriage. But there is an exception if the ex-spouse dies and the surviving divorced spouse waits until 60 or later to remarry.

Ex-widows or widowers can continue to collect survivor benefits, assuming that they are larger than any other benefit to which they are entitled on their own work record or as the spouse of a new mate.

Many financial advisers are familiar with these basic rules of survivor benefits and remarriage, but there is a wrinkle that I recently learned about, and I have to thank an InvestmentNews reader for bringing it to my attention.

Frank, an adviser in Fort Lauderdale, Fla., encountered this situation with one of his clients.

A divorced woman who was collecting survivor benefits on her ex-husband’s earnings record decided to remarry at 66.

The man she planned to marry was also divorced. He had wisely filed a restricted claim for spousal benefits only on his ex-wife’s earnings record and planned to delay collecting his own retirement benefit until it was worth the maximum amount at 70.

So we know that the surviving ex-wife can continue to collect survivor benefits because she waited until after 60 to remarry.

But the question is whether the new husband would lose his spousal benefit based on his ex-wife’s earnings record because he remarried?

I contacted the Social Security Administration for the answer. It turns out that the new husband won’t lose his spousal benefit when he remarries someone who is collecting survivor benefits.

I was floored.

“The divorced spouse’s benefit is not affected when a person marries an individual entitled to widow’s benefits,” said SSA spokeswoman Kia Green Anderson.

That means that the new husband can continue to collect spousal benefits on his ex, even after his remarriage to the merry widow.

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