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Social Security When A Spouse Dies: Survivor Benefits Guide

New tool can help you decided when to start drawing Social Security

If your spouse dies and you have reached full retirement age, youre eligible for 100% of their benefits.

  • If your spouse dies and you have reached full retirement age, youre eligible for 100% of their benefits.
  • If your spouse retired before full retirement age, they received a reduced retirement benefit and you will receive reduced survivors benefits.
  • Children up to age 18 and dependent parents may also be eligible for survivors benefits.

Losing a spouse is one of the most stressful events you can go through. In addition to the emotional turmoil and grief, youll also have to figure out finances. When a spouse dies, the surviving spouse is eligible to receive survivor benefits from the Social Security Administration . In this article, well go over the rules and exceptions for receiving these benefits and enable you to build a plan for your survivors benefits.

How Is Unemployment Insurance Paid In North Carolina

Benefits are paid from the North Carolinas Unemployment Insurance Fund, which is funded by a tax paid by employers. What does it mean to be monetarily eligible? Monetary eligibility simply means that you have worked and earned enough wages within your base period to meet the requirements for establishing a claim.

Chapter : Maximizing Your Benefit

Many people ask can I collect my deceased spouses social security and my own at the same time? In fact, you cannot simply add together;both a survivor benefit and your own retirement benefit. Instead, Social Security will pay the higher of the two amounts.

Did you Know?

If the benefit you would receive as a survivor is higher than your own earned benefit, Social Security pays the higher of the two amounts ;not the two combined.

While it can seem unfair to not be able to claim both full benefits, there are;claiming strategies you can use to maximize the total Social Security benefits you receive. This includes switching from one benefit to the other. See an example from one of our users directly below.

Making the right decision on how to maximize your own benefits depends on how much your own retirement benefit vs. survivor benefit would be, and how long you think you will be living and needing the money. It also depends on whether youre working.

  • If you are already receiving spousal benefits when your spouse dies Social Security will convert your benefit to survivors benefits, which are up to 100% of your late spouses full retirement benefit .

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Spousal Benefits Can Be Confusing Here’s What You Need To Know

Many seniors rely on Social Security to cover their living expenses once they’re no longer working. And while those benefits won’t replace your entire former paycheck, they may, depending on when you file for them, replace a nice chunk of it.

But what if you don’t have a former paycheck to replace? The good news is that even if you never held down a job, you may still be entitled to Social Security income. As long as you’re married to someone who’s entitled to benefits, or you’re divorced from an eligible recipient, you can collect spousal benefits based on your partner or ex-partner’s work record.

That said, if you did work and are entitled to a benefit of your own, you can’t just double dip and take both benefits. Here’s what you need to know.

You’re In Poor Health

Discover the ways that you can make the most of your ...

Retirement can last 20 or 30 years if you’re a healthy senior, but unfortunately, many people develop illnesses as they age. That’s why planning for healthcare costs in retirement is so important.

If you’re in poor health, you may need the extra money that Social Security benefits provideand opt to claim benefits early. And, sadly, if you think you may not live to be very old, you could come out ahead on a lifetime basis.

This strategy could backfire if you have a spouse. If you start collecting early, it will lower your monthly benefit. But it will also lower any survivor benefits your spouse is entitled to after you pass. If your spouse outlives you for many years, this could be a serious financial hit.

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Benefit Amounts Vary Depending On Your Social Security Retirement Age

Your Social Security retirement age and the amount you receive varies depending on several factors. For example, the earliest age you can collect your Social Security retirement benefits is 62, but there is an exception for widows and widowers, who can begin benefits as early as 60. If you start collecting benefits early and continue to work, your benefits may be reduced.

Here’s how this works;with the basics on Social Security claiming ages from 60 to 70.

Bridge To Medicare At Age 65

Remember that while you are eligible for reduced Social Security benefits at 62, you won’t be eligible for Medicare until age 65, so you will probably have to pay for private health insurance in the meantime. That can eat up a large chunk of your Social Security payments.

Read Viewpoints on Fidelity.com: Your bridge to Medicare

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Can I Claim One Benefit And Then Switch To Another Later

If you are eligible for a survivor benefit before you reach your full retirement age, you can select the survivor benefit and delay receiving your benefit should it exceed the survivor benefit before or upon reaching age 70.; You can collect the survivor benefit at age 60 and then let your benefit increase until age 70.; You could switch to your benefit once it exceeds the survivor benefit or let it continue to increase until your reach age 70.

The opposite option is also available.; If your deceased spouse had not claimed their benefit and if you have reached age 62 you could claim your benefit.; When your spouses benefit is fully maximized upon them reaching age 70 you could then switch and claim the survivor benefit.

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Watch Out For Hidden Costs

If Your Spouse Dies, Can You Collect Their Social Security Benefits?

Youll also want to consider other lifestyle factors, especially Medicare. Americans become eligible for federal health insurance coverage at age 65, well after when you can begin to file for Social Security.

If you stop working at age 62 and lose health insurance, you have to get supplemental insurance to bridge the gap until you turn 65 and Medicare kicks in, Neiser says.

If you work during retirement, you have another incentive to delay collecting Social Security. Earning too much at a job after you begin collecting your benefit can reduce your payout, but only if you have yet to hit full retirement age.

However, when you hit full retirement age, your benefit will increase to account for any benefit that was withheld earlier due to working. Heres how much you can earn and not get hit.

If youre younger than full retirement age for all of 2021, the Social Security Administration will deduct $1 of your monthly check for every $2 you earn above $18,960 per year.

If you reach full retirement age in 2021, the administration deducts $1 of your monthly check for every $3 you earn above $50,520 until the month you reach retirement age.

Youll also owe Social Security and Medicare tax on your earnings, even if youre already receiving benefits.

So those are some potential pitfalls to claiming Social Security early.

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What If I Want To Work In Retirement

Sometimes leaving the workforce is neither feasible nor appealing. Thats why some;retirees find part-time jobs to pass the time or earn extra money.

But getting a part-time job after retiring early may reduce your Social Security benefit amount until you reach your full retirement age. The SSA may withhold a certain amount of money from your benefit check if your earnings exceed the annual limit. For 2019, your benefits will be reduced by $1 for every $2 you earn above;$17,640. If youll reach your full retirement age in 2019, your benefits will be reduced by $1 for every $3 you earn above a different limit up until the month you turn 67. In 2020, your benefits will be reduced by $1 for every $2 you earn above $18,240. Your benefits will be reduced by $1 for every $3 you earn above $48,600 .

The SSA doesnt penalize working retirees forever. Youll receive all of the benefits the government withheld after you reach your full retirement age and the SSA recalculates your benefit amount.

Social Security Retirement Age : If You Are A Widow/widower

If you are a widow or widower, you can receive Social Security retirement benefits as early as 60. If you;have not reached your full retirement age, and you are still working and earn more than the earnings limit, your;benefits will be reduced. Once you reach full retirement age, no more reductions will apply, regardless of how much you work and earn. Those working will want to consider waiting until their full retirement age to begin widow/widower benefits.

One option available to widows/widowers is to file a restricted application, which means you can begin one type of benefit, such as a survivor benefit; then when you reach 70, you can switch over to your retirement benefit amount if it would be larger.

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Will My Social Security Benefits Be Reduced If I Work

A worker who claims benefits before full retirement age may run into the earnings limit, in which Social Security temporarily withholds $1 in benefits for every $2 in earnings above a certain amount in 2021, the limit is $18,960.

And though a person may need benefits to supplement low earnings, the downside of permanently reduced benefits also exists if you claim early, whether or not you exceed the earnings limit, Ms. Floyd said.

A working widow who collects a survivor benefit could also face the earnings limit. A widow can claim a survivor benefit as young as 60, though her benefit will be reduced by claiming before full retirement age. If she is working and exceeds the earnings limit, part of those reduced benefits will be withheld.

The earnings limit also applies to the spousal benefit claimed by a nonworking spouse if the other spouse is working and both are younger than full retirement age. Social Security withholds benefits on total household earnings that exceed the limit.

Withheld benefits are not lost forever, however. At the beneficiarys full retirement age, Social Security will adjust the monthly benefit upward to account for the withheld benefits. The beneficiary will continue to receive the higher payment even after she recoups the withheld benefits, which could take 12 years.

Taxes On Your Benefits

Social Security Survivor Benefits for a Spouse

Your Social Security benefits may be partially taxable if your combined income exceeds certain thresholds. Regardless of how much you make, the first 15% of your benefits are not taxed.

The SSA defines combined income using this formula:

  • Your adjusted gross income + nontaxable interest + half of your Social Security benefits = your combined income

If you file your federal tax return as an individual and your combined income is $25,000 to $34,000, then you may have to pay income tax on up to 50% of your benefits. If your combined income is more than $34,000, then you may have to pay tax on up to 85% of your benefits.

If youre married, filing a joint return, and your combined income is $32,000 to $44,000, then you may have to pay income tax on up to 50% of your benefits. If your combined income is more than $44,000, then you may have to pay tax on up to 85% of your benefits.

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You Think You Can Get A Better Return

You’ll get an 8% increase in your benefit each year past your full retirement age, up until you reach age 70. That means if you’re 67 and wait three years to claim benefits, your check will be 24% larger when you finally start.

But if you’re a savvy investor, it might make sense to start collecting those benefits sooner rather than later. Why? You could collect your Social Security benefits early, invest the money, and beat that 8% annual return.

Of course, there are risks associated with this strategy. Unless you have a crystal ball, you have no idea how the markets will perform. One bad year could wipe out any gains as well as your initial investment.

Can Too Many Early Retirees Affect Social Security

Regardless of when you retire, youll receive around the same amount of Social Security benefits over the course of your lifetime. This is due to cost-of-living adjustments that attempt to protect seniors from inflation.

In other words, Social Security balances itself out. Early retirees receive lower monthly benefits over a long period of time while late retirees receive larger benefit amounts over a short period of time. Retiring early does not affect the Social Security programs finances because the amount of benefits available does not depend on how early or late someone retires.

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The Second Best Choice

Single Social Security claimants who want to hold off until age 70, but find they cant quite wait any longer should select age 69 for the best trade off, according to Christopher Jones, chief investment officer at Edelman Financial Engines.

That sacrifice may be as little as a few thousand extra dollars in additional lifetime benefits in exchange for starting a year earlier, according to Jones.

If youre single, well tell you you should wait until 70, Jones said. It is generally preferable to do so.

“But its not quite as critical as it is going from 66 to 67, or 67 to 68.

In a low interest rate environment, it’s hard to beat the potential increases for every year you delay claiming your benefits, Jones said.

Thats a guaranteed real rate of return backed by the federal government, Jones said. You cant get real rates of return at 6% to 8% right now not even close in the marketplace.

A Few Basics About Survivor Benefits

Can I collect Social Security Retirement and Social Security Disability?

There are a few other specifications and things to note about your eligibility for receiving survivor benefits that arent necessarily related to the surviving spouses age. For example, neither the deceased spouse nor the surviving spouse needs to work for more than ten years in order to be eligible. However, the SSA does have a special rule that if youve worked for only one and a half years in the past three years just before your spouses death, the SSA can pay benefits to your children and to you if you are caring for the children.

Even though your deceased spouse was working and paying into Social Security, your survivor benefits will likely be reduced if you are working. This is also dependent on whether your earnings exceed a certain limit and if you are younger than the full retirement age.

If you have remarried and are over sixty years old , you should still be eligible for receiving survivor benefits. However, if you choose to remarry and are under sixty years old, then you are ineligible to collect survivor benefits.

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Earnings Limits For Retirement Benefits

  • Full retirement age. Beginning with the month that you reach full retirement age, which depends on your birth year, you can make unlimited income without any reduction in your Social Security benefits. You will continue to pay Social Security taxes on your earnings, even if you’re receiving benefits.;
  • Under full retirement age for the entire year. If you haven’t yet reached full retirement age, you can earn up to $17,640 in income each year without any reduction in benefits. But for each $2 you earn above this limit, the Social Security Administration deducts $1 from your benefit payments.
  • Under full retirement age for part of a year.;If you will reach full retirement age in 2019, you can earn up to $46,920 with no benefit reductions in the months leading up to the month you reach full retirement age. If you exceed this income limit, the Social Security Administration will deduct $1 for each $3 you earn above the limit. Beginning with the month in which you reach full retirement age, you can make unlimited income and receive full Social Security benefits without any reduction.

How To Calculate Social Security Benefits

Lets say your FRA is 66. If you start claiming benefits at age 66 and your full monthly benefit is $2,000, then youll get $2,000 per month. If you start claiming benefits at age 62, which is 48 months early, then your benefit will be reduced to 75% of your full monthly benefitalso called your primary insurance amount. In other words, youll get 25% less per month, and your check will be $1,500.

That reduced benefit wont increase once you reach age 66. Rather, youll continue to receive it for the rest of your life. It may go up over time due to cost-of-living adjustments , but only slightly. You can do the math for your own situation using the Social Security Administration Early or Late Retirement Calculator, one of a number of benefit calculators provided by the SSA that can also help you determine your FRA, the SSAs estimate of your life expectancy for benefit calculations, rough estimates of your retirement benefits, individualized projections of your benefits based on your personal work record, and more.

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