About a month ago, I wrote a column in which I explained how “full retirement age” (the age at which a person can claim 100 percent of his or her Social Security retirement benefits) is going up.
To quickly recap, FRA is 66 for people born between 1943 and 1954. But if you were born in 1955, your FRA is 66 and 2 months. If you were born in 1956, it is 66 and 4 months. And it keeps going up in two-month increments for each year of birth until it caps off for folks born in 1960 and later. They have to be 67 to get full benefits.
Congress did not change the early retirement age. It remains at 62 no matter what your full retirement age is. But because there is a pro-rated monthly reduction for early retirement, the higher your FRA is, the greater your age-62 reduction will be. For example, if your FRA is 66, you would get a 25 percent reduction if you take benefits at 62. But if your FRA is 67, the age-62 reduction will be 30 percent.
The age at which widows and widowers can claim full benefits is also going up. But it goes up at a different rate. I am usually pretty good at providing the rationale behind various Social Security laws and regulations. But for the life of me, I cannot explain why widows (and widowers) have a slightly different FRA. I know that Congress didn’t get around to passing the law increasing FRA for survivors until a few years after they increased it for retirees. But why they simply didn’t match the age increases is a mystery to me.
Anyway, the age at which a widow can claim full benefits is 66, if she was born between 1945 and 1956. You will note that is two years behind the retirement age increase. Then, like the retirement age FRA, it begins to go up in two-month increments. Widows born in 1957 must be 66 and 2 months. Widows born in 1958 must be 66 and 4 months. And it continues to climb incrementally until it caps off at age 67 for widows born in 1962 and later. (For retirees, the age 67 cap began with folks born in 1960.)
And, as with retirees, Congress did not change the earliest age at which a widow can claim benefits. It remains at age 60. But because Congress apparently doesn’t like messing around with a widow’s monthly Social Security benefits, they did not change the reduction factor. So, for example, a widow who was born in 1949 and whose FRA is 66 can opt to take a 29.5 percent reduction if she takes benefits at 60. Likewise, a widow who was born in 1962 would get the same 29.5 percent reduction if she also starts her benefits at 60.
Q: I am 61. My husband of 35 years died several months ago. I filed for and received the Social Security death benefit. When I asked about widow’s benefits, they rather curtly told me I wasn’t eligible, so I just left it at that. Now I’m wondering if I should be getting something. Can you help? Here is some background. Both my husband and I worked all our lives. He always made a little more than I did. I am thinking of retiring next year.
A: Assuming you are making considerably more than the Social Security earnings penalty limit of $15,720, then you are not due any benefits right now. But if you retire next year, you will have a couple of options.
You could, for example, take reduced retirement benefits (assuming you are 62 or older when you retire). You would get about 75 percent of your full retirement benefit. Then when you reach age 66, you could switch to 100 percent of your widow’s rate.
Or you could go the other way around. You could start out taking reduced widow’s benefits at age 62. You’d get an 81 percent benefit rate. Then you’d continue with those benefits until age 66, when you would switch to 100 percent of your own. Or you could opt to wait until age 70 when you would get a “delayed retirement bonus” of 32 percent added to your retirement rate. In other words, you’d get 132 percent of your retirement benefit if you can hold off making the switch until age 70.
Which way you go (taking the widow’s benefits first or taking your own retirement benefits first) depends entirely on the money amounts involved. So you will have to ask someone at your local Social Security office what your retirement and widow’s benefits are and then sit down with a calculator and figure out what to do.
If, as you said, your husband always made “a little more” than you did, then my hunch is your Social Security benefit rates are similar, with his probably being slightly more than yours. If that’s the case, then my educated guess is that your best option would be to take reduced widow’s benefits now and let your own benefit continue to grow until age 70 when you could make that switch to the 132 percent retirement rate.
And finally, here is a note of clarification for some of my readers. As a general rule, widows are the only Social Security beneficiaries who have the option of taking reduced benefits on one record and later switching to full benefits on another record. If you are a retiree who elects to start benefits before full retirement age, you MUST file your own retirement benefits. You can NOT claim benefits from a spouse and later switch to your own. If, however, you hold off until age 66 to claim benefits, then you can play this switching game. For example, you could claim one half of your spouse’s Social Security and delay your own until 70, and then switch to the 132 percent rate.
