Ask Larry: Will My Wife’s Widow’s Benefit Be Reduced If I Die Before Her Full Retirement Age?

Today’s column addresses questions about what factors can potentially reduce benefits for a surviving spouse, whether cost of living allowances also increase spousal benefits and whether a public pension will affect a spouse’s own retirement benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Will My Wife’s Widow’s Benefit Be Reduced If I Die Before Her Full Retirement Age?

Hi Larry, I’m 78 and have been retired for several years. I’ve been collecting approximately $3,000 based on my full retirement age. My wife is 64 and is eligible for approximately $1,200/mo at FRA in just over two years. She has not yet filed for early retirement.

Because of my age and because we are heavily dependent on my SS income, we are concerned about how the monthly payout would be affected if I die before she reaches FRA.

If I die before her FRA of 66 and four months, will she get a widow’s benefit equal to my retirement benefit without adjustment, or is my retirement reduced based on her age at the time of my death?

If it will be reduced, will it return to the full amount of $3,000 when she reaches her FRA? And if she applies for early retirement benefits now, what effect will that have? Thanks, Arnold

Hi Arnold, One quirk that you’ll want to know is that if your wife’s full retirement age (FRA) for Social Security retirement benefits is 66 and four months (i.e. she was born in 1956), her FRA for widow’s benefits is still 66.

The legislation raising the FRA for widow’s was passed later than the legislation raising the FRA for retirement benefits, so people born in the years 1955 through 1961 have different FRAs for retirement and widow’s benefits.

If you started drawing your benefits at FRA or later and if your wife starts drawing widow’s benefits before her FRA, her widow’s rate will be reduced for age. The percentage reduction would vary depending on how far in advance of FRA that she starts drawing the widow’s benefits. The closer she is to FRA when she starts drawing, the lower the applicable percentage reduction.

Any such reduction would be permanent and would not go away when she reaches FRA, assuming that none of her benefits end up being withheld due to her earnings.

If your wife is at least FRA when she starts drawing widow’s benefits, she would be eligible for a benefit rate equal to the higher of a) her own rate, or b) your full benefit rate.

Drawing her own retirement benefits earlier than FRA would not affect your wife’s benefit rate as a widow. And if you die before she reaches FRA, your wife could choose to draw just her own retirement benefits and wait until FRA to apply for unreduced widow’s benefits.

Your wife may want to strongly consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze all of the available options and make an informed decision about the best strategy for maximizing her benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Will My COLA Increases Be Included When Calculating My Wife’s Spousal Benefits?

Hi Larry, My FRA was 12/2018. Will the increases to my PIA due to COLAs be included when Social Security determines what my wife’s spousal benefits will be at her FRA this March? Thanks, Phil

Hi Phil, Yes. All Social Security cost of living increases (COLA) that occur after a person reaches 62 are automatically credited to their primary insurance amount (PIA), which is equal to their full retirement age (FRA) retirement benefit amount, regardless of whether or not they’ve started drawing their benefits.

And since unreduced spousal benefits are based on 50% of the worker’s PIA, any COLA increases credited to you would also increase the spousal benefit rate potentially payable to your wife. Best, Larry

Am I Correct That WEP And GPO Won’t Affect My Wife’s SS?

Hi Larry, I will retire from teaching in a public school in Ohio with STRS after 35 years next year. My wife paid into Social Security for the past 40 years. I haven’t paid much into Social Security so do not expect to receive any at age 65.

However, I want to make sure my wife is able to receive all of Social Security she earned through her own work. Am I correct to assume that neither the WEP or the GOP will reduce her own Social Security benefits?

Will she stop getting her own Social Security retirement benefit if I pass away and she becomes the beneficiary of my STRS pension? Thanks, Tom

Hi Michael, Yes. Neither the Windfall Elimination Provision (WEP) nor the Government Pension Offset (GPO) provision will affect your wife’s Social Security benefits unless she receives a pension based on her own work where her earnings were exempt from Social Security taxes.

Your wife’s own Social Security benefits won’t be affected by your STRS pension, nor would her benefits be affected if she receives a survivor pension based on your non-Social Security covered earnings. Best, Larry