Michigan Social Security Planning: Surviving Spouse

Making financial decisions shortly after a spouse passes away is very difficult. Especially, if it was the deceased spouse that handled the financials. Still, it is very important that you understand how your social security will change when one spouse passes away. The best time to plan and understand the changes is before your spouse passes, but even after he or she has passed there are still things that you can do to maximize your benefit. This post discusses how your social security survivor benefit will be impacted based on your age

Under 60 years old

You are not able to collect a surviving spouse social security benefit until you reach age 60, unless you are disabled. Therefore, even if your spouse was collecting social security, you will need to wait to start your own benefit. If you are concerned that you will lose social security income prior to reaching age 60, you may want to consider life insurance on the older spouse until the younger spouse hits age 60.

Between age 60 and 62

At age 60, you will be able to start collecting a widows social security benefit. This benefit will be reduced though as you are starting the benefit early. You don’t have the option to draw your own benefit until age 62. The big decision that you will need to make is if you should start your benefit early and receive a smaller amount for the rest of your life, or wait and receive a higher benefit later.  

Between age 62 and your Full Retirement Age (FRA)

This is really where some additional planning can go a long way, as you have some different options. First, your Full Retirement Age (FRA) is between 66 and 67, depending on your age. Once you hit age 62, you will have the option to collect either your own benefit or your surviving spouse benefit. The surviving spouse benefit is your spouse’s benefit, but it is reduced because you have not hit FRA according to social security.

At this point, many people will simply collect whichever social security benefit is higher, but that isn’t necessarily always the best case. For example, you can start by collecting your surviving spouse benefit, and postpone collecting your own until later. This allows you to delay and grow your social security benefit while collecting the surviving spouse benefit now. This strategy tends to work best when the social security benefits between the two spouses are similar or the surviving spouse has a smaller benefit now but will eventually grow bigger. You can delay and grow your own social security benefit until age 70.

You can only implement this strategy if you haven’t started your own benefit. If you are currently collecting social security, you will simply get the higher of the two benefits.

Between your Full Retirement Age (FRA) and age 70

Like we mentioned previously, you still have the option to collect the widows benefit and delay your own benefit until age 70. The benefit though of delaying the widow social security benefit until after FRA is that you will collect your spouse’s full benefit, and it will not be reduced because of your age. Again, you can only implement this strategy if you have not started collecting already.

After age 70

You will simply get your benefit or your spouse’s benefit, whichever is higher.

Social security is tricky and the options can be overwhelming. The last thing you want to do after a spouse passes is spend hours at the social security office going through all of your options. Being prepared can go a long way to maximizing your long term social security benefit.

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