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To follow up on my recent column about how to receive spousal benefits based on an ex-spouse’s earnings record, today we’ll take a look at what happens when your ex-spouse dies.
Once you’ve begun receiving the spousal benefit, that benefit will continue for the rest of your life, or until one of the following occurs:
- Your ex-spouse is no longer eligible for a retirement benefit.
- You become entitled to a retirement benefit that is larger than your current benefit.
- You become entitled to a larger spousal benefit based on a different ex-spouse’s record.
- You become entitled to a survivor benefit that is larger than your current benefit.
- You remarry.*
- Your ex-spouse dies.
*Remarriage will not cause spousal benefits to cease if you marry someone who is currently receiving spousal benefits, mother’s or father’s benefits, survivor benefits, or disabled child benefits. If you remarry your ex-spouse and he or she has not already started receiving benefits, your spousal benefit will cease until such time as your new (old) spouse begins receiving retirement benefits.
The last item in the list above is what we’re covering today, the case of your ex-spouse dying while you are collecting spousal benefits based on your ex-spouse’s earnings.
As indicated, upon the death of your ex-spouse, the spousal benefit will stop. If you are entitled to a retirement benefit based on your own earnings record (this would be an amount less than the spousal benefit), that amount of the retirement benefit will continue for you.
Even though the spousal benefit will cease upon the death of your ex-spouse, upon his or her death you become eligible for a new benefit called a survivor benefit (in SSA parlance, a widow’s or widower’s benefit). This survivor benefit is equal to the retirement benefit that your ex-spouse was receiving at the time of his or her death (with some exceptions, but that’s another column).
Let’s review an example: Don and Teresa were married for 20 years, and have been divorced for over 10 years. Teresa was the breadwinner of the couple, while Don pursued his passion for music, but just never got that big break. When the two reached age 62 within a few months of one another, Don, who never remarried, was eager to file for Social Security benefits. He is eligible to receive a spousal benefit based on Teresa’s quite significant earnings record. At a maximum Don could receive $1,250 in spousal benefits.
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Since Don started receiving benefits at age 62, there is a reduction. Don began receiving $875 per month based on Teresa’s earnings record. Sadly, six months after Don started receiving spousal benefits, Teresa died.
Upon Teresa’s death, Don will lose his spousal benefit; but he becomes eligible for a survivor’s benefit based on Teresa’s record. Teresa had not yet begun to receive her own retirement benefit, so Don is eligible for a maximum of $2,500 a month in survivor benefits. Once again, since Don is younger than the full retirement age, there would be a reduction in benefits if he chose to start receiving the survivor benefit at his current age of 62 years and 6 months. However, if Don were to delay until his full retirement age, he could be eligible to receive the full $2,500 benefit.
Since Don’s own retirement benefit (based on his own earnings record, and reduced due to his early filing age) amounts to $500 per month, Don could continue receiving $500 per month and delay for a while (up to his full retirement age) before applying to receive the survivor benefit. On the other hand, he could file immediately for the survivor benefit, which would also be reduced since Don is younger than full retirement age.
If he chooses to file for the survivor benefit right away at his age of 62 years and 6 months, Don will be entitled to a reduced monthly benefit in the amount of roughly $2,062. This benefit would not change over time, other than the annual COLAs when applicable, or if Don were to become eligible for a different benefit at some point in the future.
If delaying is the choice, Don could continue receiving his $500 monthly benefit based on his own earnings record, and then later switch over to the survivor benefit. He can switch over at any time and each month that he delays will result in an increase to the survivor benefit, up to his full retirement age.
Readers: Do you have a question about Social Security? Email us at HelpMeRetire@marketwatch.com
