Maximizing Social Security Survivor Benefits for Spouses

I have a client who is 62 and thinking of retiring and taking Social Security.  Her husband is 74 and waited until 70 to collect his retirement benefits.  They want to maximize her SS when he passes away.

She has worked and earned enough credits to collect off her own record at 62.  If she goes ahead and collects at 62 on her record, then I think the deemed filing applies and they will look at her record and his and she will get the higher of the two, reduced for age.  Correct?

Regarding survivor benefits, if she waits till her Full Retirement Age to switch to survivor benefits would she collect off his benefit without reduction or because she collected prior to FRA on her own record, will the widow benefit would be reduced?  I think if she waits there would be no reduction but if she takes the widow benefit prior to her FRA then it would be reduced.  Please clarify.

Good news is the husband already maximized the survivor benefit by waiting until 70 to collect his benefit.  She can file at age 62 on her own and if her PIA is less than ½ of his PIA she would also draw an additional spousal benefit (boost).  Upon his death, if she waits until her Full Retirement Age to file for widow benefits she will receive 100% of what he was receiving at death.  If he dies before she is full retirement age she can wait to take widow benefit at FRA but would lose the spousal boost in the meantime. Your understanding is mostly correct, but let’s clarify the details to ensure your client maximizes her Social Security benefits:

1. Collecting at Age 62:

   • Deemed Filing: If your client begins collecting her own Social Security benefits at age 62, deemed filing will apply. This means she will automatically be evaluated for both her own benefit and a spousal benefit (if eligible), receiving the higher of the two. However, both benefits will be reduced for early filing.

2. Spousal Benefit (Boost):

   • Spousal Boost: Since her husband waited until 70 to collect his benefits, he has maximized his benefit amount, which also impacts the survivor benefit. If her Primary Insurance Amount (PIA) is less than half of his PIA, she will receive a spousal benefit boost, which is added to her own benefit. However, because she is filing before her Full Retirement Age (FRA), this spousal boost will also be reduced.

3. Survivor Benefits:

   • Switching to Survivor Benefits: Upon her husband’s death, she has the option to switch to survivor benefits. If she waits until her FRA to claim the widow’s benefit, she will receive 100% of what her husband was receiving at the time of his death, with no reduction for early filing.
   • Impact of Early Filing: If she starts collecting her own reduced benefit at 62 and then switches to survivor benefits at her FRA, the widow’s benefit will not be reduced. The survivor benefit will be based on her husband’s benefit at the time of his death, not on her own reduced benefit.
   • Before FRA: If she decides to take the widow benefit before reaching her FRA, the survivor benefit will be reduced.

4. Strategy:

   • Optimal Strategy: Given that her husband maximized his benefit by waiting until 70, the best strategy for her would likely be to start her own benefit at 62, receive the spousal boost if eligible, and then switch to the full survivor benefit at her FRA if her husband passes away.

In summary, by waiting until her FRA to claim the survivor benefit, she can maximize her Social Security income, receiving the full amount of what her husband was getting at the time of his death. If she takes the survivor benefit before FRA, it would be reduced.

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