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What are Survivor Social Benefits?
Anytime a spouse passes away, it throws our life into a bit of chaos, because we have to recalibrate and figure out who we are, what is happening in life, and of course, that financial component, figuring out where our income is coming from and where our expenses are going.
Social Security becomes a big component for people's retirement income and as a surviving spouse, it could be that you are eligible today for some income right away or it might be at some point in the future. If you are under the age of 60, you will not be eligible for benefits unless you have children or a dependent in the home that is relying on you for income.
The first most critical piece of information that you can get from the Social Security Administration is the spreadsheet where they break down your survivor benefit, starting at age 60 and every single month after that, all the way until your full retirement age, which might be between age 66 or 67, depending on how old you are.
Once you have that document, you can go to a Social Security expert or a financial planner and have them layout side by side what your benefit options are.
When is Spousal Survivor Benefit Possible?
There are three main scenarios for spousal social security survivor benefit when one of the partners dies.
The first is when both are already claiming Social Security checks when one spouse passes away, only one check will be valid, so the spouse will be allowed to choose the higher of the two benefits.
The second scenario is if one of them is claiming or neither of them was claiming Social Security check depending on age. The living spouse will be able to choose which check to claim from age 62 to 70. Sometimes in that frame, if you are claiming your late spouse's social security benefits, you are able to tap into that as early as age 60.
The third scenario is when you are not a participant in Social Security and maybe you have a government pension, a state teacher's pension, or some other pension where you didn't actually pay into Social Security but your late spouse did.
What happens in this situation is called a government pension offset where a Social Security check will be reduced by two-thirds of your pension check.
Calculating Social Benefits Survivor
Social Security survivor benefits aren't always calculated the same way that retirement benefits are calculated. There are provisions in place for an alternate calculation if you die early.
Social Security benefits are calculated in three basic steps, and it is really important to understand them if you want to get all you can out of Social Security even as a survivor. The 3 steps are adjusting historical earnings for inflation, getting the monthly average from the highest 35 years, and applying the monthly average to the benefits formula.
But what happens if you die before you have worked 35 years or just 20 years? And are survivor benefits always calculated the same way as retirement benefits?
With retirement benefit, 35 years are used in the calculation regardless of if you have worked for that long or not. So if you have only worked for 20 years there is going to be an extra 15 years of zeroes included in your benefits calculation.
However, in the case of death, there is an alternate calculation that differs from the normal calculation in two key areas. Instead of using the highest 35 years, the SSA will take the number of years between the attainment of your age 22 through the year of death and subtract the least 5. What is left is then divided by the number of months in those years.
For example, if Mark dies at 40 years old, the administration would index his earnings for inflation and take the number of years beginning at age 22, and ending at his death. This would be 19 years, and they would then drop all five of the lowest-earning years after they were indexed, and that would leave him with the highest 14 years of earnings.
Since there are 168 months in 14 years, that would be the averaged index monthly earnings that would then be applied against the benefits formula that was in effect for the year of death.
This is where the other key difference in the calculation comes in, as long as the deceased person was under the age of 62 when they died, along with a few of the restrictions, SSA will also do another calculation called windexing to see if it produces a higher result.
Windexing is just one of the administration's famous word combinations and it stands for Widows Indexing. This alternate calculation compares the benefits payable from doing the calculation with the formula that is in place the year a person dies and then they will also look at the formula for the year the surviving spouse reaches age 60, or the year the deceased person would have reached age 62.
This is important because the benefits formula generally increases every year and a higher benefits formula would produce a higher social security benefit.
How Long Do Social Security Benefits Last for?
When your spouse passes away, you may wonder how long social security will be in place for you, on your spouse's record. Well, that depends on a couple of things.
After death, one of the first things that you will try to figure out as a spouse is how much income to live on? From where does it come? And how long will you have that income? Also, remember that you cannot stack incomes on top of each other, for social security purposes.
Also, you cannot take your benefit and your late spouse's benefit at the same time. However, you can do a switching strategy. But how long does that survivor benefit last?
The short answer is, as long as you are living, that benefit will be there, but this also depends on how old you are.
If you are older than age 70, the Social Security Administration will automatically increase your benefit to whoever is higher between you and your deceased spouse’s benefit. So if that is your survivor benefit, that survivor benefit will last with you as long as you are living, even if you get remarried.
If you are between the ages of 60 and 70, your survivor benefit will last as long as you are living. Even if you remarry. However, the caveat is that if you decide to switch to your personal benefit, then that survivor benefit will turn off because you can't collect two benefits at the same time.
If you are under the age of 60 and you have a child, you will be receiving a benefit on behalf of the child until that child turns 16. And then the benefit goes away for a period of time. This is called the widow's gap, a period between when your child turns 16, and when you turn age 60.
Once you turn 60, so long as you are not married on that snapshot date of your birthday of turning 60, then you are able to collect that survivor benefit, and it will last for the rest of your life, so long as you are living, even if you marry on the day after your 60th birthday.
But it is highly recommended that you wait to remarry until after age 60 if you are already really close to your 60th birthday.