Mary Beth Franklin

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Widower asks why he didn't get survivor benefits

Blame it on family maximum limits, not sexism

Jul 16, 2014 @ 12:09 pm

By Mary Beth Franklin

Social Security, minor children, survivor's benefits, retirement
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I received an e-mail from a widowed dad who asked why he didn't receive Social Security survivor benefits when his wife died eight years ago.

“When my wife died in 2006, we had children who were 14 and 16 years old,” he wrote. “The children received survivor benefits until they were out of high school.”

The reader asked the Social Security Administration why he, too, didn't receive survivor benefits. He was told he was not eligible at the time, but he could begin collecting them once he turned 60.

“In this age of political correctness, why is it a wife can collect survivor benefits but a husband cannot?” he asked me.

I assured the reader that he was not the victim of a sexist plot.

Social Security benefits are gender neutral. Surviving spouses of either sex are eligible for survivor benefits of their deceased mate as early as age 60 and, in some cases, at younger ages if they are caring for the deceased worker's minor children who are under age 16.

Normally, a widow or widower who is full retirement age or older can collect 100% of the deceased worker's Social Security benefit. Surviving spouses can collect benefits as early as age 60 (or age 50 if disabled), but benefits would be reduced to 71% of the basic amount.

A widow or widower of any age, caring for a child under age 16, is entitled to survivor benefits worth 75% of the basic benefit amount. Each child under age 18, or 19 if still in high school, is also entitled to a benefit worth 75% of the deceased worker's basic benefit amount.

But there are limits to how much one family can receive based on a deceased worker's earnings record. The limit varies, but it is generally equal to 150% to 180% of the basic benefit rate. If the sum of the benefits payable to family members is greater than this limit, the benefits are reduced proportionately.

And anyone who collects Social Security benefits before full retirement age is subject to earnings cap restrictions. In 2014, beneficiaries lose $1 in benefits for every $2 earned over $15,480.

“Your two children each received 75% of your late wife's Social Security benefit for a total of 150% of her benefit, bumping you up against the family maximum limits for benefits based on an individual worker's benefit,” I explained.

Presumably, the husband continued to work to support his family after his wife's death and likely earned substantially more than the earnings limit in effect at the time, effectively wiping out any benefit he might have received.

“By the time your older child aged out of benefits at age 18, your younger child had already turned 16, eliminating your opportunity to collect benefits as the surviving spouse caring for a minor child of the deceased,” I added.

I told the reader that he could collect survivor benefits as early as age 60 but they will be reduced in comparison to what he would receive if he waited until his full retirement age of 66 to put in a claim. And I warned that if he collected survivor benefits before reaching his full retirement age while he continued to work, his benefits would be subject to earnings restrictions. But once he reached full retirement age, any forfeited benefits would be restored.

I also noted that as a surviving spouse who is also entitled to his own retirement benefits, he could collect one benefit first and switch to the other later if that would result in a bigger benefit.

For example, now that the reader has turned 60, he can collect reduced survivor benefits, assuming he retires and is not subject to earnings restrictions, or wait until his full retirement age of 66 to collect full survivor benefits worth 100% of his late wife's Social Security benefits.

But survivor benefits never get any bigger than the amount available at full retirement age. Survivor benefits do not accrue delayed retirement credits, but retirement benefits do. Delayed retirement credits are worth 8% per year for every year you postpone collecting retirement benefits beyond full retirement age up to age 70.

So this widowed dad could collect survivor benefits first, and at 70, he could switch to his own retirement benefits which would be worth 132% of his full retirement age benefit, assuming that amount was larger than his survivor benefits.

(Questions about Social Security? Find the answers in my new ebook available at www.investmentnews.com/MBFebook.)

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