How To Maximize Social Security Survivor Benefits

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There is a little known strategy that can really help you to maximize your Social Security benefits, if you are entitled to a survivors benefit from a deceased spouse.

If you have a decent Social Security benefit based off of your own work record, and are also entitled to a survivors benefit from your spouse, then this strategy may work for you.

Here's how it works:

If you are entitled to a Social Security survivors benefit, you can begin collecting the survivors benefit early, before you turn 62, and then let your own benefit grow to as long as age 70 to fully maximize your own benefit. It is very important to note, that you must begin collecting your survivors benefit before you become eligible at 62. If you wait until after you turn 62, this strategy won't work.

To give you an idea of how this works, let's look at an example:

Here I have a brief summary of David and Elaine's Social Security Benefits at 62, their full retirement age, and if they waited to collect at age 70.
There are two key factors in determining how much she will get.If David passes away, Elaine would be entitled to a survivors benefit from Social Security.As you can see Elaine has a pretty decent Social Security benefit based off of her own work history. That's why this strategy works so well for them.

1. When she decides to take it

For this example, we are going to assume that Elaine is going to begin taking her survivors benefit as soon as she can, at age 60.

Just like your own benefits. When you collect early, before your full retirement age, it will be at a reduced amount depending on your age. If you collect at age 60, the reduction factor is 28.5%. Meaning that Elaine's survivor benefit would be reduced by 28.5%. 1

2. The second factor is whether David was already collecting his benefit, or, if he hadn't started yet.

If David hadn't started to collect benefits, or if he started collecting before his full retirement age, then Elaine's survivor benefit would be, equal to, David's Primary Insurance Amount, $2,200/month, the amount he would get at age 66, and then discounted by 28.5% for taking it early. Remember your PIA is the amount you are entitled to at your FRA.

So Elaine would get a survivors benefit of $1,573/month at age 60.

If David had delayed his benefits past full retirement age then Elaine's benefit would be based on the actual amount David was receiving, and then reduced for taking it early at age 60.

I know this gets a little complicated.

Here in this example Elaine can collect $1,573/month at age 60 and let her own benefits grow to age 70.

Not counting the cost of living increases she would be able to collect $37,752 by the time she turns 62.

By the time Elaine turns 70, she will have maxed out her own benefit, and can then switch from her survivors benefit to her own benefit.

So her Social Security income increases from $1,573/month to $2,448/month. Not a bad increase!

Again, if she waits until she turns 62. She must take her own benefit because it's higher. She not only loses out on collecting for an extra 2 years, but she loses the growth on her own benefit.

Remember, there are a lot of factors to consider when deciding when and how to maximize your Social Security benefits. Before implementing any strategy, be sure to talk with a financial professional that can help you review all your options.
If you want to get more tips and strategies like this, click on the link below to check out my free retirement guide, how to retire happy, 7 simple steps to creating your ideal retirement