Questions from Young Widows

Last week, I answered questions about Social Security widow’s benefits. But I ran out of column space before I ran out of questions to answer. So, this week, more questions and answers about widows. Last week’s questions were mostly from older women in their 70s and 80s. Today’s questions come from younger widows.

Q: My husband recently died at age 45. I am also 45. We have three children, ages 11, 14 and 16. I called the Social Security office to file for benefits for the kids. But I got all confused when the agent started talking about what he called “mother’s benefits” and maximum family benefits and benefits stopping at age 16. I thought the kids get checks until they are 18. Can you help me understand what is going on?

A: I’d be happy to help. And you’ll see it’s actually not going to be all that complicated.

Each child is technically due an amount equal to 75% of your husband’s basic Social Security benefit.

But there is a rule that sets a maximum amount that can be paid to a family getting survivor benefits. The formula for determining the exact maximum amount can get a little messy. But it usually comes out to around 180% of your husband’s basic benefit.

To explain further, let’s use an example. Let’s say your husband’s basic benefit rate is $2,800. Again, each child is technically due 75% of that, or $2,100. That would come out to a total of $6,300. But the maximum amount that can be paid to your family is 180% of $2,800, or $5,040. So, each child will get one-third of that, or $1,680. ($1,680 times 3 equals $5,040.)

If you were not working, you would also technically be due a widow’s benefit. (The term the Social Security Administration uses to refer to benefits for a young widow with children is “mother’s benefits.”) So, you could apply for mother’s benefits and get added to the beneficiary rolls. But right now, it wouldn’t make any sense because your family is already getting the maximum amount possible, or $5,040. Or to put that another way, if you were also getting benefits, your Social Security pie would just be split four ways instead of three. In other words, you’d get four checks at $1,260 each per month instead of three checks at $1,680 each per month.

When your oldest child is no longer eligible for benefits, then it would make sense for you to apply for mother’s benefits. That’s because then you’d be down to two kids each due the 75% rate, or $2,100 per child, for a total of $4,200. And with a family maximum of $5,040, that leaves $840 per month that could be paid to you.

Each child is due benefits until he or she reaches age 18, although benefits can continue until age 19 if they are still in high school.

The age 16 rule you heard about is the cutoff age for mother’s benefits. Or to put that more precisely, you are due mother’s benefits until your youngest child turns 16 (although the child continues to get benefits until age 18).

Q: I am turning 62 soon. My husband died many years ago. At that time, I got benefits for myself and for our two kids, who are now grown and married themselves. Will the benefits I got way back then reduce what I am now due in widow’s benefits?

A: No. The “mother’s benefits” you received years ago have no effect on what you now might possibly be due in widow’s benefits. To understand what you might be due, read the answer to the next question.

Q: I will be 60 next month and I plan to retire then. My husband died about 10 years ago. What choices do I have with respect to my own Social Security benefits and my widow’s benefits?

A: You have several choices, and which way you go depends entirely on the benefit amounts involved.

Basically, you’ll be able to employ the “widow’s option.” This is an option no other Social Security beneficiary has. Normally, a Social Security recipient can NOT take reduced benefits on one account and then later switch to full benefits on another account. But a widow can do that. The best way to explain this is with examples. Let’s assume your husband’s basic Social Security benefit is $2,500 per month and that your basic full retirement age benefit is $3,000 per month.

So, you could start out with reduced widow’s benefits at age 60. At 60, a widow gets about a 70% rate, so you’d get 70% of $2,500 or $1,875 per month. You could collect those benefits until your full retirement age, at which point you could switch to 100% of your FRA benefit, or $3,000 per month. Or you could wait until age 70 and get roughly a 30% “delayed retirement credit” added to your monthly benefits. That means you’d get $3,900 per month starting at age 70.

To clarify things a little more, let me turn things around and assume your husband’s benefit is higher than your own benefit. So, let’s say your own full retirement age benefit is $1,800 per month and that your husband’s full retirement age benefit is $3,000 per month. In this case, you would want to take your benefits first and then later switch to widow’s benefits. Or to be more precise, you would file for reduced retirement benefits at age 62. (That is the earliest that a retirement benefit can be paid.) You’d get about 75% of $1,800, or $1,350 per month. Then, once you reach your full retirement age you could switch to 100% widow’s benefits, or $3,000 per month. (There are no “delayed retirement credits” paid on a widow’s benefit, so there would be no advantage to waiting past your full retirement age to collect widow’s benefits.)

And by the way, if these were your numbers ($1,800 for you and $3,000 in widow’s benefits) another choice would be to forgo this “widow’s option” stuff and simply file for widow’s benefits now. In other words, at age 60, you’d be due about 70% of $3,000, or $2,100 per month. And that would be your benefit for good, except for future cost-of-living increases.

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