Comparing survivor’s benefits and your own


Q. I am getting Social Security survivor’s benefits and I’m still working. I’m 65 and will continue to work until age 68. Will I then draw my on my own Social Security at a higher amount or will they keep me at my wife’s benefit amount since I started collecting it at age 62?
— Retirement-bound

A. Let’s take a look at how this all works.

First, it’s important to note that the election of your Social Security survivor benefits does not impact the election of your own Social Security benefits.

In your circumstance, where you elected to take your Social Security survivor’s benefit at age 62 — which is before your full retirement age (FRA) — you have been receiving less than 100 percent of the survivor benefit you were entitled to had you waited until your FRA, said Bryan Smalley, a certified financial planner with RegentAtlantic in Morristown.

Assuming that your FRA is 66, you have been receiving roughly 80 percent of your FRA benefit, he said. This reduced benefit will continue as long as you continue to receive your survivor benefit.

Smalley said an interesting and often overlooked aspect of the survivor benefit is that it does not impact the benefit amount you are entitled to receive off of your own working record.

“If you decided to collect your own benefit next year at age 66, you would start collecting 100 percent of your FRA benefit — assuming you FRA is 66 — despite the fact that you collected your survivor benefit early,” he said. “This aspect of the Social Security survivor benefit often leads many people to start collecting their survivor benefit early, especially if their own benefit is the higher of the two.”

This allows their own benefit to grow over time while still benefiting from the Social Security income now, he said.

Now to your specific question of whether Social Security will require you to stay on your wife’s benefit once your stop working. The answer is no, Smalley said.

“You have the ability to switch over to your own benefit at any time,” Smalley said. “Of course, you should weigh heavily when you elect to switch over to your own benefit since it is an irrevocable decision.”

Consider what your benefit would grow to if you did not elect to touch it until age 70. Ask yourself: How much of an impact would the 32 percent cumulative growth — 8 percent per year — from age 66 to age 70 have on your financial plan?

Perhaps it makes sense to continue to collect the survivor benefit until you reach age 70, Smalley said.

Consider speaking to a financial advisor who can go over all your finances to help you make the smartest decision for you.

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