Seems like there is always something to learn. No matter how much you know and study a subject, it seems there are always factors that are uncovered that you weren’t aware of – and I find this sort of thing from time to time. Recently, I have been made aware of a couple of factors that I had misunderstood previously about Social Security Survivor Benefits – thanks to my friend Dana Anspach, who blogs over at MoneyOver55.About.com. Thanks Dana!
Limit on Reductions to Survivor Benefits
The first factor is one that I wasn’t even aware of – regarding how reductions on Survivor Benefits work in a very specific situation. The situation is when the deceased spouse was not at least at Full Retirement Age and he or she was receiving retirement benefits as of the date of death.
In this situation, the amount of benefit that is used to begin the calculation for Survivor Benefits is the greater of
- The deceased spouse’s actual benefit; or
- 82.5% of the deceased spouse’s PIA
As such, in this particular set of circumstances, the starting point for determining Survivor Benefits cannot be less than 82.5% of the deceased spouse’s PIA.
Amount of Survivor Benefit Available
The second factor that I wasn’t clear about is where the deceased spouse was, again, not at least at Full Retirement Age (FRA) but in this case he or she was NOT currently receiving retirement benefits as of the date of death.
The part that needs to be clarified is that the deceased spouse’s age isn’t a factor in determining the amount for the base factor unless he or she would now be older than FRA had he or she survived to the date that the widow(er) applies for Survivor Benefits.
In other words, when the deceased spouse was not receiving retirement benefits and he or she would not have attained FRA by this date, the Survivor Benefit is calculated based on 100% of the PIA of the deceased spouse. The Survivor Benefit is not reduced based upon the deemed attained age of the decedent.
On the other hand, if the deceased spouse was at least FRA or older than FRA as of the date of death and not receiving benefits, the Survivor Benefit amount will be based upon the decedent’s PIA plus the applicable credits for delay beyond FRA. The Delayed Retirement Credits are accrued up to the month of death.
In either case, the age of the surviving spouse is a factor – if the surviving spouse is less than his or her own Full Retirement Age (FRA), reductions will be applied to the starting factor mentioned above, based upon the age of the surviving spouse.
I’ve gone back through previous articles to update any language that was contrary to these additional factors, but I may have missed some – let me know if you find any others. Hopefully this hasn’t caused any major difficulties for you.