After 70 Survivor Benefits

Someone wonders whether their survivor benefits would be based on their wife's age-70 amount or her Full Retirement Age amount.

"My wife is 16 years older than me. She waited until age 70 to collect her Social Security benefits. (She was born in 1949.) I am now approaching 62. If she passes before me, are survivor benefits calculated as if my wife started her Social Security benefits at age 70 or at her Full Retirement Age?"

When someone who was collecting Social Security passes away, if a surviving spouse will receive a survivor benefit based on that work record, the survivor will retain all the delayed retirement credits the deceased person earned before passing away.

Your wife has obviously collected all the available delayed retirement credits because she didn’t claim until age 70, which was several years ago. That means she has pegged her Social Security benefit at the maximum.

The only caveat for you is that you would need to be age 67, your Full Retirement Age (FRA), to receive the full amount she was collecting. If you claim earlier than your FRA, the survivor benefit you receive will be reduced by about 4% for each year you claim early.

Social Security calculates benefit reductions on a monthly basis, but the cumulative survivor benefit reduction factor is just a bit over 4% per year. If you have heard a different number as a reduction factor, that’s because different benefits have different reduction factors for early claiming. Retirement benefits and spousal benefits have their own reduction factors, and survivor benefits have a third, unique reduction factor: about 4% per year.

You’re approaching age 62. If your wife were to pass away within the next five years, it would ‘cost’ you about 4% for each year you’re early. Today, at about five years early, you’d receive about 20% less than you would if you waited.

Hopefully, your wife has a long life ahead of her, and you’ll be well beyond age 67 before she passes. That way, if she's the one with the larger retirement benefit, you would have the right to step into her shoes and collect the full survivor benefit, including all the delayed retirement credits she earned by waiting until age 70 to claim.

This is all good news – except for that one little warning: that if you were to claim before age 67, your action would reduce what you receive. It would have nothing to do with her reaching 70 or Social Security doing something to her benefit. The fact that you were claiming your survivor benefit before your FRA would cause Social Security to reduce your survivor benefit by about 4% per year.