Losing a loved is a stressful time. Alongside the emotional stress is the financial stress. One source of financial stress for recent survivors can be Social Security. Social Security is a complicated system on its own, let alone for survivor benefits. Widows and widowers have their own special rules when it comes to claiming Social Security. Here are five such rules to be aware of:
1. How long do you have to be married to collect a survivor benefit?
Generally, nine months. However, this requirement is waived if you are caring for a child of the deceased spouse who is under 16.
2. Earliest age you can collect a survivor benefit
If you are 60 years old, you are eligible to claim a Social Security survivor's benefit. Your survivor benefit is based on the earnings of the person who died. The more they paid into the system, the higher your benefits will be. However, if you are under your full retirement age, which is age 66 for people born in 1945-1956 and will gradually increase to age 67 for people born in 1962 or later, then you will receive a reduced benefit. This reduced benefit at age 60 is 70% of the benefit if you had waited till your full retirement age.
3. Switching from Survivor Benefit to your regular retirement benefit
The Bipartisan Budget Act of 2015 made significant changes to Social Security, mainly doing away with file-and-suspend and filing a restricted application. However, this did not change for survivors. Widows and widowers may still start their survivor benefit independently of their own retirement benefit by restricting their application to only the survivor benefit as early as age 60. Then at your full retirement age or later you can switch to your own retirement benefit. Delaying your own retirement benefit allows that benefit to continue to grow and accrue delayed retirement credits.
4. Collecting a deceased divorced spousal benefit
Most individuals don't know they may be eligible for a deceased divorced spousal benefit. If you are the divorced spouse of a worker who dies, you could get benefits the same as a widow or widower, provided that your marriage lasted 10 years or more. However, if you remarry before your age 60, the remarriage will affect your benefit. If you remarry after age 60, the remarriage will not affect your eligibility for a divorced survivor benefit.
5. Dependent children, dependent parents, and the family maximum
If caring for a child or a parent, there may be benefits available as well. For example, a widow or widower - any age - caring for a child under age 16 is eligible for benefit, 75% reduced. A child under age 18 of a survivor or disabled (19 if still in elementary school) is eligible for a benefit, 75% reduced. If caring for a survivor's dependent parent, age 62 or older, then there is a reduced benefit as well. All of these benefits are subject to the family maximum.
There is much more than these 5 rules for survivors. There are documents to gather and be aware you can't claim online, but in person. Put it all together and you can see why Social Security can be considered complicated. Widows and widowers need to be aware of these and other special rules when it comes to claiming a survivor benefit. Having a plan is a prudent first step in ensuring you make the right choice. After all, most Social Security choices are irrevocable so you want to get it right the first time. If you're interested in learning more, consider my 5 Step Survivor's Financial Plan.