Social Security rules for the twice-widowed client

Surviving spouse can choose when to collect each benefit.

The majority of American adults marry at least once during their lifetimes, but only about 40% of them stay married, according to the U.S. Census Bureau.

Some Americans go on to marry a second time and a small percentage — 4% — marry three times or more.

“Age is an important factor relating to remarriage as older individuals have had more time to see a previous marriage conclude and to remarry,” according to the Census Bureau report, Remarriage in the United States. “The proportion of men and women married twice is about 20% or higher for men and women aged 50 to 69,” the report said.

[More: If I remarry what happens to my social security: Social Security rules when widows remarry]

That probably explains why I get so many questions about Social Security claiming strategies for serial spouses. This one came from Heather Piskorz, a retirement income specialist with Game Plan Financial, a marketing company that works with insurance professionals.

“I’m working with a client who was married for 15 years and later divorced in the 1980s,” Ms. Piskorz wrote to me in an email. “Shortly afterward, she remarried but her second husband died in 2013 and her first husband died about the same time,” she explained. “Can she file for the lower survivor benefit first and switch over to the higher one when she reaches full retirement age?”

Yes, she can.

Because she was married more than 10 years to her first husband before their divorce, she qualified for Social Security benefits as an ex-spouse. Normally, she would lose the right to claim benefits on an ex-spouse’s earnings record if she remarried — unless that subsequent marriage ended in death or divorce.

And that’s precisely what happened. She was an eligible divorced spouse. Then she wasn’t when she remarried. But now the both husbands have died, she is both a widow and a surviving divorced spouse and can collect on each of their earnings records, one at a time.

(More: New Social Security rules and divorce )

“Generally, when a person is eligible for widow(er)’s benefit on more than one record, he or she may restrict the application for widow(er)’s benefits to one record so that he or she may apply for higher benefits on the other record at a later date,” said Social Security Administration spokesperson Nicole Tiggemann.

“To restrict the application, the person must provide a statement that he or she does not wish to file for a specific benefit,” Ms. Tiggemann added. “This must be done before the application for widow(er)’s benefits is processed.”

A surviving spouse or ex-spouse can collect reduced survivor benefits as early as age 60 or full survivor benefits, worth 100% of what the deceased worker was collecting or entitled to collect at time of death, at the survivor’s full retirement age. But survivor benefits do not grow larger by waiting until after full retirement age to collect them as they do not qualify for delayed retirement credits.

The instructions about restricting an application to a specific survivor benefit are very important. Otherwise, if the client does not specify which benefit she wants to claim, Social Security would only pay her the higher of the two benefits as illustrated in this example from the SSA’s Program Operations Manual System: “A widow is entitled to a benefit of $850 before reduction on one deceased husband’s record. She is also entitled to a benefit of $670 before reduction on her second deceased husband’s record. Each benefit is reduced separately and the higher is paid.”

Because the twice widowed client’s own retirement benefit is smaller than either of her husbands’, it would make the most sense to claim the smaller survivor benefit first, which would be reduced by claiming it before her full retirement age, and then switch to the larger survivor benefit when she turns 66 and continue collecting that benefit for the rest of her life.

(More: A widow’s Social Security dilemma )

That advice assumes the widow is not working. Anyone who collects any type of Social Security benefit, including survivor benefits, before full retirement age is subject to earnings restrictions. In 2016, beneficiaries who are under full retirement age for the entire year would forfeit $1 in benefits for every $2 earned above $15,720. In 2017, that earnings limit increases to $16,920. A higher limit applies in the year one reaches full retirement age in the months leading up to the beneficiary’s 66th birthday and disappears after that. Any benefits forfeited to the earnings cap are restored at full retirement age in the form of larger monthly benefits.

(Questions about Social Security? Find the answers in my e-book: Maximizing Social Security Retirement Benefits.)

Mary Beth Franklin is a contributing editor to InvestmentNews and a certified financial planner.