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Ask Larry: Should I Take My Widow’s Benefit Early While Delaying Retirement Benefits Until 70?

Today’s column addresses questions about whether it’s always best to wait until full retirement age to take survivor’s benefits before switching to retirement benefits at 70, how the earnings test is applied this year and benefit amounts for disabled adult children. 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.


Do I Need To Wait Until My FRA To Get My Maximum Social Security Widow’s Benefit?

Hi Larry, I will be 65 in June of 2021. I am still working full time and hope to keep working until 67.

My husband passed away in 2017 at 69. He began collecting his Social Security retirement benefit at a reduced rate when he was 64. I plan to file for widows benefits as soon as I can without a penalty.

Do I have to wait until I am 66 and four months to file for my deceased husbands benefits without a penalty or can I apply earlier at 65? I will be switching to my retirement benefits at 70. Thanks, Liz

Hi Liz, I’m sorry for your loss. If your husband started drawing his Social Security retirement benefits at 64, your widow’s benefit rate probably would already have reached its maximum rate.

When a deceased worker collected reduced retirement benefits prior to their death, the maximum benefit rate that can be paid to a widow is limited to the higher of a) the worker’s reduced benefit rate, or b) 82.5% of the worker’s primary insurance amount (PIA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

Since you’re nearing 65, it sounds like you’d probably already be eligible for your highest possible widow’s rate.

However, whether or not you could actually be paid any benefits prior to your FRA depends on how much you’re earning. If you continue working throughout 2021, for example, Social Security would likely need to withhold $1 of your benefits for each $2 that you earn in excess of $18,960 this year.

You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


If I Start Drawing My Benefits In June 2021 How Much Will I Actually Be Able To Keep?

Hi Larry, My wife is retiring at 62 this June and she’s thinking about starting her Social Security retirement benefit then. If I start drawing my Social Security retirement benefit at 65 this June and I’m still working, how much will I actually be able to keep compared to waiting till my full retirement of 66 and four months. Thanks, Joel

Hi Joel, The answer to your question depends on how much you’re earning and how much your benefit rate is. If you apply to start drawing benefits in 2021, Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $18,960 this year. However, you could be paid at least for any months in 2021 in which you earn no more than $1,580.

The earnings test exempt amount mentioned above is higher in the year that you reach full retirement age (FRA), and there’s no limit on how much you can earn and still collect all of your benefits starting with the month in which you reach FRA. Best, Larry


Will My Son’s Benefit Amount Change When I Start To Receive Social Security?

Hi Larry, I have an adult son who is mentally handicapped and he is collecting Supplemental Security Income (SSI). I am 65 and am wondering whether, when I start to receive my Social Security retirement benefit, I will need to change anything for him and will the amount he receives change? Thanks, Sarah

Hi Sarah, It sounds like your son may qualify for childhood disability benefits (CDBs), also known as disabled adult child’s (DAC) benefits, once you start drawing your Social Security retirement benefits.

The benefit rate that can be paid to CDB beneficiaries on the record of a living parent is 50% of the parent’s primary insurance amount (PIA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If your son does qualify for CDBs, his Supplemental Security Income (SSI) payments will be reduced basically dollar for dollar by the amount of his CDB. If his CDB rate is higher than his SSI rate, his SSI payments will stop.

You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. As I noted above, Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry


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