Chris Stein, CFP®
Social Security Survivorship Benefit at Husbands Age 62
A reader from Pennsylvania wonders what her Social Security survivorship benefit would be if her husband claimed benefits early at age 62.
"I have a quick question regarding survivor benefits. If my husband has taken Social Security early at 62, will my survivor benefit be reduced if I am over 70 when he dies? He says my benefit doesn't get reduced and that I would get what his Full Retirement Age (FRA) benefit would be had he waited for his FRA to claim. I know you spoke about this once before, but I can't remember the answer."
There are two reductions to benefits that we need to discuss here. The first – and most obvious – is what I think you were alluding to when mentioning you'd be over 70 when receiving the survivor benefit. Would your age reduce your survivor benefit? No, because you will have reached your Full Retirement Age (FRA), somewhere between 66 and 67. If your spouse dies before your FRA and you claim your survivor benefit then, that could reduce the benefit you could otherwise receive – because you're claiming it before your FRA. You're clearly not going to be affected by that situation because, in your hypothetical, you're over 70. So, no reduction because of your age.
Here's the second possible reduction. Your husband claimed his Social Security benefits at 62, and depending on his FRA, the resulting reduction would be 25-30% of what he would have received had he claimed at his FRA. His comment about how early claiming works with survivor benefits is not correct. By default, the standard for survivor benefits is that the survivor will collect whatever the recently deceased spouse was collecting – or could have collected the night before they died had they not claimed yet. That's not your spouse's case, as he claimed at 62 with a reduced benefit. The standard is that you'll just step into his shoes and collect what he was collecting. In other words, his age 62 benefit.
But, there's a "gotcha" – a detail that will help a lot but not in the way he's describing. What he described is incorrect: you won't step in and magically get his FRA benefit. But, you also won't suffer the full harm of his early claim at 62. The reason is thanks to a rule called the Widow's Limit, or technically, the RIB LIM. RIB stands for Retirement Insurance Benefit, and LIM is how they shortened "limit."
This rule is designed to protect a widow or widower – a survivor – from a spouse who claimed too early and now dies. When I say "claimed too early," they claimed early, thus reducing their own benefit. They are now passing that early claiming reduction on to their widow, who is in a difficult position because they lost their spouse.
So, Social Security created a special rule that will help limit the downside reduction that the survivor will experience if the deceased person had claimed early. That's the LIM part. The rule's a little complicated, but it essentially says that the maximum reduction from the spouse's FRA benefit will be no more than 17.5%.
Remember what I said before: when your husband claimed at 62, he reduced his FRA benefit by 25-30%. I also said that the entire reduction would typically be passed on to you in the survivor benefit. But, because of the special RIB LIM rule, the downside reduction will be limited to 17.5%. It won't restore you to your spouse's total PIA – the benefit he would have received had he waited for his FRA. (That's precisely what your husband is claiming will happen, and that is not true.).
In your case, the RIB LIM rule will probably reduce your reduction by about half, so you'll get some of it back when he passes away, but it will not bump you up to his FRA benefit. It's good news for you, but not as good as your husband claims.
If you want to look into this, look up the Social Security RIB LIM rule, and you can read all about it. I would go directly to the Social Security website or some other trusted source because many people misinterpret how this works.
We haven't talked about the RIB LIM in quite a while. It doesn't affect too many people, but it does affect some, so I'm happy to see your question come through.