I've seen an uptick in questions from financial advisers about their widowed clients and what happens to their Social Security survivor benefits if they remarry. The good news is that surviving spouses have more claiming options than other types of Social Security beneficiaries, regardless of when they were born. But timing is crucial.
The increase in questions on this topic is likely to challenge financial advisers for years to come as millions of widowed and divorced baby boomers find love after loss and look for guidance on how to update their financial plan to suit their new romantic status.
There are now about 50 million Americans age 65 and older. Older women outnumber older men 27.5 million to 21.8 million, and about a third of those older women are widowed.
Anthony Capristo, a financial adviser and retirement income specialist with Forthright Wealth Planning in eastern Pennsylvania, asked about his client, Jon, who is 59. Jon is dating Jean, 53. Both Jon and Jean were previously married but their respective spouses passed away.
"They have been hesitant to get married at some point in the future because they do not want to lose valuable benefits from Social Security," Mr. Capristo wrote to me in an email. "Can Jon and Jean both collect widows' benefits when they turn 60 and still get married after Jean's 60th birthday without losing those benefits?" he asked.
A widow or widower who was married at least nine months to a deceased worker, including at the time of the worker's death, is entitled to reduced survivor benefits, which range from 71.5% of the deceased worker's benefit if collected at age 60 up to 100% of the deceased worker's benefit if collected at full retirement age.
Full retirement age for survivor benefits may be different than the full retirement age for retirement benefits. For example, someone who was born in 1955 has a full retirement age of 66 and 2 months for retirement benefits but can still collect full survivor benefits at 66.
If a surviving spouse remarries after age 60 (or age 50 if disabled), the remarriage does not affect their survivor benefits. They could continue to collect survivor benefits even while married to someone else.
Eligible surviving divorced spouses who were married at least 10 years before their divorce are also entitled to Social Security survivor benefits if they wait until age 60 or later to remarry. However, they lose to right to collect spousal benefits on a living ex's earnings record if they remarry at any age.
"If Jon and Jean both wait until at least 60 to remarry, they can each collect reduced survivor benefits on their late spouses' earnings record," I replied. "But they would be subject to earnings restrictions if they continue to work and claim any type of Social Security benefit before full retirement age." In 2019, they would lose $1 of benefits for every $2 earned over $17,640.
If they are still working, they may want to wait until full retirement age, when the earnings test disappears, to collect full survivor benefits. Survivor benefits are worth the maximum amount when collected at the survivor's full retirement age.
But survivor benefits do not qualify for delayed retirement credits, unlike retirement benefits, which grow by 8% per year for every year benefits are postponed beyond full retirement age up to age 70.
Technically, these surviving spouses could restrict their Social Security claim to survivor benefits while allowing their retirement benefits to continue to grow to the maximum amount at age 70 and then switch to their own retirement benefits if those are larger than their survivor benefit.
Don't confuse this recommendation to file a restricted claim for survivor benefits, which can be done by any surviving spouse or surviving ex-spouse regardless of when they were born, with a different strategy of filing a restricted claim for spousal benefits at age 66. That strategy, which allows one spouse to collect half of a living mate's or ex-mate's full retirement age benefit, is being phased out. It is available only to people who were born on or before Jan. 1, 1954, which means the last group of people who are eligible to file a restricted claim for spousal benefits turns 66 this year.
Another adviser asked about a widowed client who lost two husbands to cancer, one after 10 years of marriage and the other after eight years. The client is 67 and is planning to let her own retirement benefit grow until she reaches age 70.
"Can she apply for benefits on her first husband's record even though he died before claiming Social Security?" the adviser asked.
Yes, she can file for survivor benefits on whichever late husband had the bigger benefit and allow her own retirement benefit continue to grow until 70.