Consider the Spousal and Widow Benefit!
Calculating the spousal benefit can get very complicated. We will not get into all of the benefit combinations here, but there are a few rules to mention.
If you are married you are eligible for your own benefit based on
- Your earnings or
- A spousal benefit which is up to 50% of your spouse’s benefit.
There is one other issue to consider and that’s the “Widow Benefits.”
We have a couple, Paul and Linda.
Here is what Linda’s “Widow Benefit” would look like under various scenarios.
|Filed at 62||Filed at age 70||Died prior to FRA||Died at age 70|
|Widow Benefit = Paul’s reduced benefit $1,500/month||Widow Benefit = Deceased Benefit (plus COLAs)||Widow Benefit = PIA* of Deceased||Widow Benefit = Deceased benefit as if deceased elected on date of death|
|Linda Claims Widow(er) Benefits at age 60|
|Receives 71.5% of the deceased PIA* $1,430||Receives 71.5% of the deceased benefit $1,887/month||Receives 71.5% of deceased PIA* $1,430/month||Receives 71.5% of the deceased benefit as if he had just elected $1,887/month|
|Linda Claims Widow(er) Benefits at age 66|
|Receives $1,650 Due to Widow Limit benefit is capped at the greater of the deceased spouse’s benefit or 82.5% of the deceased PIA*||Receives full survivor benefit $2,640/month||Receives Deceased PIA* $2,000||Receives full survivor benefit $2,640/month|
Note that if Paul delays filing until age 70, Linda is eligible for Paul’s full delayed retirement benefit. This is something to consider if you are concerned about your spouse’s income after death.
*PIA = Primary Insurance Amount.