Dear Rusty: My husband is 70 and has been taking Social Security for several years. His benefit is $2,100 per month. I am 60 and will turn 61 in March. I have very little built up and my expected SS benefit at my full retirement age is $1163 and $829 if I choose to take it at age 62. We are comfortable with our current income, but the benefit at 62 is enticing. I want to know how taking it at 62 would affect my situation if my husband predeceases me. Would I then be able to exchange my benefits for his? Please advise. Planning Ahead
Dear Planning: Taking your own SS benefit early (before your full retirement age) won’t affect the amount of your survivor benefit should your husband predecease you. The only thing that would affect your survivor benefit is the age at which you claim it. So yes, you could claim your own benefit first and then switch to your survivor benefit later without hurting your eventual survivor benefit. If you have reached your full retirement age (FRA) when your husband passes, your survivor benefit will be 100% of the amount your husband is receiving at his death, instead of your own smaller benefit. But if you take the survivor benefit before your FRA, it will be actuarially reduced according to the number of months prior to FRA it is claimed. To be clear, if your husband were to pass before you reached FRA, you have the option to wait until your FRA to claim the survivor benefit (so you can get 100% of his benefit). In other words, you could continue to collect your own benefit until your survivor benefit reached 100% at your FRA (a survivor benefit reaches maximum at FRA).
Be aware, though, that there is another consideration if you claim your own SS benefit before you reach your full retirement age. If you are still working and claim your benefit before your FRA, you’ll be subject to Social Security’s “earnings limit” which, if exceeded, will cause SS to take back future benefits equal to 50% of the amount you exceeded the limit by (the 2020 limit is $18,240, but it changes annually). If you have substantial earnings from working, that could mean you will go some number of months without benefits (depending upon your earnings level). In the year you reach your FRA (but prior to your FRA) the earnings limit goes up by 2.6 times and the penalty is less, and once you reach your FRA there is no longer an earnings limit. But, I want to make sure you’re aware that collecting early and exceeding the earnings limit will affect your benefits. If you go months without benefits because you exceeded the earnings limit, SS will give you time credit for those months when you reach your FRA, which will result in a small increase in your own SS benefit at that time.
But the bottom line is that collecting your own Social Security benefit early will not affect your eventual survivor benefit. Only the age at which you claim it, if earlier than your FRA, will affect the amount of your survivor benefit. And, by the way, your FRA as a widow is 4 months less than your normal FRA because SS takes 2 years off of your birth year to determine your “widow’s FRA.”