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The Social Security Widow's Dilemma

Retirement Planning Social Security Finances and Planning for Women

Anna will turn 65 years old later this year.  Unfortunately, her husband passed away a few years ago.  She now faces a situation with her Social Security benefits called the Widow’s Dilemma. We discuss the important things she needs to know about Social Security Survivor benefits.

Watch Now:  The Social Security Widow’s Dilemma

  • 0:00 – Intro
  • 0:13 – Disclaimer
  • 0:20 – Welcome
  • 0:36 – The situation
  • 1:09 – Where to Start
  • 2:34 – Additional Complexities in Anna’s situation]
  • 3:39 – Anna’s Social Security benefit Options
  • 4:39 – More common Social Security Survivor benefit situations
  • 6:36 – Social Security Survivor benefits for divorced spouses
  • 7:55 – The Government Pension Offset
  • 11:14 – The key information needed to make a good choice
  • 14:03 – Final Thoughts
  • 16:15 - Outro

Anna’s Situation

Anna sent us this question:

I’m turning 65 this year, and I’m starting to think about my retirement.  My husband died six years ago when he was 58.  I’m confused about what I should do with my Social Security benefits.   I’m still working and am considering retiring when I’m eligible for Medicare in November.  My options seem so confusing, can you help me understand what I need to do.

She faces what we call The Social Security Widow’s dilemma.

Start at the Beginning

Anna’s first step is to understand how the age she claims Social Security benefits affects the amount she will receive.  This is determined by her Normal Retirement Age.  This is the age when you receive 100% of your benefit or your survivor benefit and it is based on the year you were born.

Anna will be 65 later this year.  She was born in 1957.  This means her normal retirement age is age 66 and 6 months.  Claiming her Social Security benefits at age 65 results in a reduced benefit.  Her benefit is reduced 5/9 of 1% each month she starts her benefits early.  

Claiming benefits at age 65 is 18 months before her normal retirement age,  This results in a 10% discount to either her benefit or her survivor benefit.

Claiming Her Social Security Benefit or a Survivor Benefit

Anna is going to have a choice.  She can file for benefits based on her own earnings record or a survivor benefit based on her late husband’s earnings.   The next part of her decision comes down to knowing the amounts of each monthly benefit.

But there’s a twist.

The Widow’s Dilemma

After looking at the numbers, Anna is going to have a choice to make.

  • Claim a survivor benefit based on her late husband’s earnings record.
  • Claim her Social Security benefit based on her earnings record.

But it isn’t as simple as choosing between door number one or door number two.

Anna can start collecting a survivor benefit now.  At age 70, she can switch to her benefit if it is more.  Her benefit will increase from Delayed Retirement Credits.  Delayed retirement credits allow your Social Security benefit to increase 8% each year you delay taking your benefits up to age 70.

A Unique Situation

This is not a common situation for most retirees.  Most couples will both be receiving Social Security benefits.  If that is the case, the surviving spouse will continue the higher of the two benefits and the lower amount will stop.  

Other things to Know About Survivor Benefits

  • You can receive a survivor benefit as young as age 60.  But remember, discounts will apply if you are younger than your normal retirement age.
  • Children 16 or younger or disabled children can also receive a survivor benefit.
  • If you are receiving a survivor benefit, and you are younger than your normal retirement age, your benefits will be reduced for the amount you earn over the annual earnings limit ($19,560 for 2022).

Survivor Benefits for Divorced Spouses.

If you were divorced before your former spouse died, you can still qualify for a survivor benefit.   Many of the same rules apply for divorced spouses (The most important of which is being married for at least 10 years).   The other rules for survivor benefits will also apply.

Getting remarried could impact your survivor benefits.  If you get remarried prior to your 60th birthday, you will not be able to file for survivor benefits.  But if you remarry after age 60, you can still qualify for survivor benefits based on your ex-spouse’s earnings.

Be Aware of the Government Pension Offset

If you worked for a government entity—particularly in the state of Ohio—you may be subject to a provision called the government pension offset.  

State and municipal employees often pay into a retirement system other than Social Security.  This includes the State employees retirement system (SERS), Ohio public employees retirement system (OPERS), or the State Teachers Retirement System (STRS).  Those employees do not pay into Social Security either.  

For those people, their survivor benefits are subject to the Government Pension Offset.  This complex provision can reduce your Social Security benefits to zero.  It is very complicated so proceed with caution.

Know Your Numbers

When you are planning for your retirement, it is important to know your numbers.  Get your Social Security benefit estimates.  Have a good understanding of your other assets, your spending, your debts, and your goals.  Retirement planning is complex and our planners are here to help you make sense of the numbers.  Fill out the form below to connect with one of our planners.





Appearing in this video:

Nikki Lude, CFP®

Nikki is a financial planner in Woodsfield, Ohio.

Julie Daley, RICP®

Julie is a financial consultant in St. Clairsville, Ohio.

Neal Watson, CFP®

Neal is a financial planner in Marietta Ohio. .