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Social Security Filing Strategies for Widows

For the recently widowed, there are many painful questions that have to be answered. Unfortunately, many of those questions are about money. When you should be focusing on family and saying goodbye, you instead have to deal with questions about loss of income and the decisions that need to be made. social security filing strategies for widows

For widows and widowers approaching retirement, many of the money-related questions have to deal with Social Security. Because a spouse has spent his or her entire life working and paying into the system, it doesn’t seem right for it all to go to waste. Shouldn’t the widow be entitled to the Social Security benefits of the deceased?

The short answer is yes. Social Security pays out what are known as “survivors” benefits to the widows and widowers of deceased spouses. While it does come with several rules to follow, the good news is that you can use this benefit to help maximize the amount of Social Security you receive each month. 

This can be important, especially when it means a loss of income makes it harder to pay the bills and live a comfortable life. By understanding the rules of filing for survivor benefits, you can use the right strategy to ensure the highest possible Social Security benefits for your remaining years.

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What You Need To Know

The first thing we should do is dispel a myth or two about survivor benefits, what they are, and what they are not. Survivor benefits basically means that, should you qualify, you are eligible to receive your late spouse’s Social Security benefits. There is a filing process and there are some requirements that must be met, but in the most general terms, most seniors are able to qualify. 

However, what confuses many filing for survivor benefits is that a widow is NOT able to receive both survivor benefits as well as his or her own Social Security. Simply put, you cannot receive benefits for two different people at the same time, regardless of your circumstances. 

While this might make you think “What’s the point?,” what you need to know is that you are able to file for either one, depending on which one will ultimately pay out the most amount of money over the course of your remaining years.

Because of this, knowing what your options are becomes crucial in getting the most out of your Social Security.

The Rules for Survivor Benefits

So, before we talk about the best strategies for widows and widowers, we first have to understand the rules The Social Security Administration states that widows and widowers are eligible to receive survivor benefits if they meet one of three requirements:

  • They are at least 60 years old (although, as we shall see, filing so young can result in reduced benefits over time).
  • They are at least 50 and also receiving disability benefits that have started within the last seven years, or
  • They are any age, not remarried, and are also taking care of at least one of the deceased’s children who is 16 years old or younger, or a child of any age but also receiving disability. 

If the survivor in question meets at least one of those criteria, then it is possible to file for benefits.

There are a handful of other people or scenarios to mention as well. For example, even if you are divorced from the deceased you might still be eligible for survivor benefits, providing you were married at least 10 years and did not remarry until you were at least 60.

Strategies for Filing

Now that we understand a little about who is and is not qualified to receive these benefits, it’s time to talk strategy. All Social Security strategies really hinge on timing; the age of the person filing goes a long way in determining how much money you can get each month.

Remember: with all Social Security filings, “full” retirement is considered to be either age 66 or 67, depending on when the filer was born. For regular benefits, you can actually file anywhere from age 62 to 70. 

The earlier you file, however, the less you receive. It’s actually a pretty significant increase over time, so it may be best to wait as long as you can before filing. Once you reach 70, however, the amount can not go up any more, so there’s no reason to wait after that.

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When filing for survivor benefits, however, you can actually file starting at age 60. The problem with that, though, is that even though you are literally filing for someone else’s benefits, in effect, the same age rules apply. So, if you are 60, you end up taking an enormous cut to what would be the “full” amount if you waited longer – regardless of how old your spouse was.

Another factor to consider is whether or not your spouse actually filed for benefits before passing away. If he or she did, then it doesn’t matter what your age is when you file for survivor benefits – you will be locked into whatever benefit amount your spouse was already receiving. 

So, if you’re doing the filing, you have to take your age into account. If your deceased spouse has already filed, you have to take that amount into account. 

However, here’s the kicker: even though you can’t collect both your own benefits as well as your spouse’s survivor benefits, you can pick which one you want to collect – whichever is higher. And, more importantly, you can start with survivor benefits (i.e. at age 60), and then switch to your own benefits later.

With this in mind, the best strategy for most situations becomes clear. Figure out whose benefits would end up giving you the most: yours, or your spouse’s. Then, it just depends on the answer to that question.

If Your Benefits Are Higher

If you are at least 60, still working and plan to continue working for a few more years, then filing for survivor benefits earlier rather than later can make sense in this case. It gives you a few years to collect survivor benefits now, even while you’re still working. 

You can collect benefits and work at the same time, which is good news. You can do both of these for several years until you reach an age where your own benefits are higher than the survivor benefits. Then, you can switch to your own benefits. In this case, waiting to 70, or as close as you can get, is your best bet.

If Your Spouse’s Benefits Are Higher

However, if you’re in a situation where your spouse’s benefits are always going to be higher than yours, then your best strategy is to wait as long as possible before filing. Work and collect income now; full wages will almost always be higher than social security benefits

Once you reach 66 or 67 and no longer have to face an early-filing penalty, then you can retire, but file for survivor benefits and receive the full amount that your spouse would have brought in. Of course, waiting until you turn 70 could make even more sense in this scenario, because then you can bring in even more per month. 

What’s the worst that could happen if you draw Social Security retirement benefits at the wrong time (or the wrong way)? You could lose an average of $111,000 in your government-guaranteed income. Ouch. Don’t let this happen to you. Learn more about our FREE Social Security Optimization Review.

These two strategies cover the majority of cases, but of course there are exceptions no matter how you look at it. If you would like to know more about what’s best for your specific situation, get in touch with us at NextGen Wealth? We are ready to help you navigate this difficult and confusing time. Contact us today!

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About the Author

Aurtho Clint Haynes, CFPThis article was written by Clint Haynes, CFP®. Clint is a Certified Financial Planner® and Founder of NextGen Wealth. You can learn more about Clint by reading his full bio here.

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