INmail: When to claim survivor benefits

Rachel: We have clients who are married and collecting Social Security. The wife claimed her own Social Security at her full retirement age to trigger a spousal benefit for her husband. The husband recently died at age 68. The widow is also 68. Can she continue collecting her own Social Security benefit until age 70 and then switch to the larger survivor benefit? Would the survivor benefit continue growing by 8% for two more years?

MBF: I am sorry to hear about your client’s loss. Unfortunately, her late husband’s benefit will not continue to grow after his death. Her survivor benefit will be based on what her husband was collecting or entitled to collect at the time of his death and her age when she claims the survivor benefits.

It seems the husband was collecting a spousal benefit based on his wife’s earning record in anticipation of switching to his maximum retirement benefit at 70. Unfortunately, he died before he could claim his larger benefits. The widow’s survivor benefit would be based on the benefit for which her late husband was eligible at the time of his death at age 68. In this case, he would be entitled to his full retirement age benefit amount plus two years of delayed retirement credits.

Delayed retirement credits are worth 8% per year for every year one postpones claiming benefits beyond full retirement age up to age 70. But they only apply to retirement benefits, not survivor benefits.

Survivor benefits are worth the maximum amount if they are collected at full retirement age. They do not continue to grow if collected after a survivor’s full retirement age. So your widowed client should file for her survivor benefits immediately.

Unfortunately, she can’t file for survivor benefits online. Normally, widows and widowers must apply for benefits in person at local Social Security offices, but due to the pandemic, field offices have been closed since mid-March. Your client should call the Social Security Administration’s toll-free number (800-772-1213) or contact her local field office for instructions on how to claim her survivor benefits. She can find the number for her local office based on her zip code at https//secure.ssa.gov/ICON/main.jsp.

Mary Beth Franklin, a certified financial planner, is a contributing editor for InvestmentNews.