When to take Social Security when you expect your spouse to outlive you

BY Laurence Kotlikoff  September 16, 2013 at 10:47 AM EST

When should you take full retirement and spousal benefits if one spouse could die much sooner than the other? You may want to wait to collect your retirement benefit to maximize your spouse’s survivor benefit. Photo courtesy of Flickr user Jon Pinder.

Larry Kotlikoff’s Social Security original 34 “secrets”, his additional secrets, his Social Security “mistakes” and his Social Security gotchas have prompted so many of you to write in that we now feature “Ask Larry” every Monday. We are determined to continue it until the queries stop or we run through the particular problems of all 78 million Baby Boomers, whichever comes first. Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version


Greg B. — Yalkima, Wash.: My spouse is 65 and a retired public employee. She receives a pension. She always paid into Social Security. I am 64 and have had higher earnings subject to Social Security. I plan to apply for a spousal benefit when I am 66 and to wait until 70 to apply for a retirement benefit. My spouse plans to wait until age 66 or later to apply for a retirement benefit.

I have had health problems and do not have a favorable family history of longevity. My spouse is in good health and has a good family history. If I receive a spousal benefit, can I earn the minimum or any amount? Upon my death, will my spouse also receive a survivor benefit in addition to her retirement benefit?

Larry Kotlikoff: Since your wife paid into Social Security, the fact that she gets a pension from previous work as a public employee will not subject her own retirement benefit to the Windfall Elimination Provision. Nor would a spousal benefit or survivor benefit going to her on your work record be subject to the Government Pension Offset provision. So you can sigh a breath of relief on that score.

If your maximum age of life is relatively short, you may want to take your own retirement benefit starting now and have your wife take a full spousal benefit at 66 (full retirement age). and then take her own retirement benefit at 70. Even though she was the lower earner, her own retirement benefit at 70 could exceed her full spousal benefit.

The downside of this strategy is that if you take your retirement benefit before age 70, the survivor benefit your wife will collect will be smaller. So if you are definitely going to die early, waiting to collect your retirement benefit may, paradoxically, make the most sense in terms of getting your wife a higher survivor benefit.

When you pass, your wife won’t collect both her retirement benefit and her survivor benefit. She’ll get the larger of the two. But Social Security will describe it as her getting her own retirement benefit plus an excess survivor benefit equal to the difference, if positive, between the survivor benefit and her own retirement benefit.

In short, you have a very tricky decision. There are likely over 20,000 combinations of dates to consider for you and your wife to take your spousal, retirement and survivor benefits if you have a relatively short maximum age of life. No one can figure this out without the right software, which I’d encourage you to consult.


Ingrid D. — Pagosa Springs, Colo.: My municipal employer was in a Public Employees Retirement Association (PERA) then switched to a self-directed plan. I do not get a pension, but I have a lump sum saved in the employer plan. I am a double dipper. I am one-and-a-half years older than my husband and taking my Social Security at age 62, getting $465 instead of the $780 that I would get at 66.

I am planning on taking half of my husband’s Social Security when he reaches 66 and claims his Social Security. If the same ratio as above applies, I will receive about the same amount that I would have received on my Social Security if I had waited until 66. Can you please verify that I am correct?

Larry Kotlikoff: You are, I’m sorry to say, incorrect. When your husband retires you will be eligible to collect an excess spousal benefit based on his earnings record, which will then be reduced, due to the Government Pension Offset (GPO) provision, by two-thirds of the imputed pension from your non-covered employment, but only once you apply for your pension or take your pension in a lump sum. If the excess spousal benefit is positive, the GPO may wipe it out.

But the excess spousal benefit may be zero if your full retirement benefit, calculated subject to the Windfall Elimination Provision (which also is applied only after you take your pension), exceeds half of his full retirement benefit.

There is software available to help you determine precisely what you will get. And it’s even possible that the local Social Security office could give you the right answer to this question, provided you talk to one of their specialists called technical experts. These are the only people from Social Security you can truly trust to get the system’s details right.


Ashley — Indianapolis, Ind.: I receive Social Security for my three kids since their dad died in 2011 (and we weren’t married). If I were to get married, would their Social Security stop or change?

Larry Kotlikoff: Your children’s survivor benefits are based on their dad’s work record, not on your work record or on your marital status. So, no, their benefits will not stop or change.


Rita — St. Paul, Minn.: My husband retired at 65 and applied for Social Security in August. I am 67, still working part time and waiting to apply for Social Security. The Social Security representative suggested I apply for spousal benefits, which I did. It was my understanding that applying for the spousal benefits over age 66 would not affect my benefits when I retire at 69 or 70. Is this correct or should I not have applied?

Larry Kotlikoff: Yes, you should immediately apply for a full spousal benefit (half your husband’s full retirement benefit) and, if you can, wait until 70 to collect your own retirement benefit. Depending on your work record, your total check at age 70 may rise since you’ll get the larger of either your age-70 retirement benefit or your full spousal benefit.


Rhonda — Pinceton, Minn.: At 55, I am seven years younger than my husband, who’s 62. His full retirement age is 65 or 66, not sure which. I currently receive Social Security Disability Insurance (SSDI) at nearly my full-retirement-benefit level, which should be when I turn 68. Can my husband start collecting a spousal benefit on my SSDI at his full retirement age, or do we need to wait until my full retirement age when my SSDI converts to retirement benefits?

Larry Kotlikoff: Unfortunately, you need to be 62 before your husband can collect a spousal benefit based on your SSDI benefit. His full retirement age is 66. If he doesn’t collect his own retirement benefit before age 70, he’ll be able to collect half of your SSDI benefit (adjusted for inflation) at age 69, and then, starting at 70, he’ll collect the larger of his own age-70 retirement benefit or half of your SSDI benefit (adjusted for inflation).


Tammie E. — Tucson, Ariz.: I am 48 and my ex husband is 53. We were married for over 10 years and neither one of us has remarried or plans to do so. He pays child support for two children and will continue to do so for five more years. His earnings are higher than mine and always have been. He has heart problems that have been repaired once. Should he pass away before age 70, what would happen to his Social Security?

Larry Kotlikoff: You can collect spousal benefits based on your ex’s earnings record starting at 62 and a survivor benefit, if he passes away, starting at age 60. Taking either of these benefits at these ages will trigger reduction factors, so doing so may not be optimal.

You have 12 years before you need to get this straight, but it’s important to understand now what you can receive. If your ex dies before your children are 16, you can collect survivor benefits as their mother (assuming these are your children), and the children can collect child survivor benefits through age 17, or through age 19 if they are still in high school, and indefinitely if they are over age 18 and disabled (provided the disability starts before age 22).



This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions