Last week, I answered questions about Social Security widow benefits. But I ran out of space before I ran out of questions to answer.
So this week, more questions and answers about widows. Last week’s questions were mainly from older women in the 70s and 80s. Today’s questions come from younger widows.
Q: My husband recently died at the age of 45. I am also 45. We have three children aged 11, 14 and 16. I called the Social Security Office to apply for benefits for the children. But I was completely confused when the agent started talking about what he called “mother’s benefits” and maximum family benefits and benefits that stopped at the age of 16. I thought the kids get checks until they are 18. Can you help me with understanding what’s going on?
ONE: I am happy to help. And you will see that it does not actually get that complicated.
Each child technically has an amount equal to 75 percent of your husband’s basic social security benefit.
But there is a rule that sets a maximum amount that can be paid to a family receiving survivor benefits. The formula for determining the exact maximum amount can get a little messy. But it usually comes to about 180 percent of your husband’s basic benefit.
To explain further, let’s use an example. Let’s say your husband’s basic benefit rate is $ 2,800. Again, every child technically needs 75 percent of it, or $ 2,100. That would come out to a total of $ 6,300. But the maximum amount that can be paid to your family is 180 percent of $ 2,800 or $ 5,040. So each child gets a third of that, or $ 1,680. ($ 1,680 times 3 equals $ 5,040.)
If you did not work, you would technically also be entitled to widow’s benefit. (The term Social Security Administration uses to refer to benefits for a young widow with children is “maternal benefits.”) So you can apply for maternal benefits and be added to the recipient list. But right now it would make no sense because your family is already getting the maximum amount possible, or $ 5,040. Or to put it another way, if you also got benefits, your social security cake would just be shared in four ways instead of three. In other words, you will receive four checks for $ 1,260 each per month instead of three checks for $ 1,680 each per month.
When your oldest child is no longer entitled to unemployment benefits, it will make sense for you to apply for maternity benefit. That’s because, then, you would be down on two kids each because of the rate of 75 percent, or $ 2,100 per child, for a total of $ 4,200. And with a family maximum of $ 5,040, it provides $ 840 per month that could be paid to you.
Each child has benefits until he or she turns 18, although the benefits can continue until age 19 if they are still in high school.
The 16-year rule you heard about is the cut-off age for maternal benefits. Or to put it more precisely, you have maternity benefits until your youngest child reaches the age of 16 (although the child continues to receive unemployment benefits until the age of 18).
Q: I will soon turn 62. My husband died many years ago. At that time, I got benefits for myself and for our two children, who are now themselves adults and married. Will the benefits I received at the time reduce what I should now have in widow benefits?
ONE: No. The “maternity benefits” you received years ago have no bearing on what you may now need in widowhood benefits. Read the answer to the next question to understand what you may be to blame.
Q: I will be 60 next month and I plan to retire then. My husband died about 10 years ago. What choices do I have regarding my own social security benefits and my widow’s benefits?
ONE: You have several choices and which way you go depends entirely on the amount of benefits involved.
Basically, you will be able to use the “widow’s option.” This is an option that no other social security recipient has. Normally, a social security recipient can NOT take reduced benefits on one account and then later switch to full benefits on another account. But a widow can. The best way to explain this is with examples. Let’s assume your husband’s basic social security benefit is $ 2,500 per month. month and that your basic full retirement age benefit is $ 3,000 per month. month.
So you can start with reduced widowhood benefits at age 60. At age 60, a widow gets about 70 percent, so you get 70% of $ 2,500 or $ 1,875 per year. month. You can collect these benefits until your full retirement age, after which you can switch to 100 percent of your FRA benefit or $ 3,000 per. month. Or you can wait until you turn 70 and get about 30 percent “delayed retirement credit” added to your monthly benefits. That means you will receive $ 3,900 per month from the age of 70.
To clarify things a little more, let me turn things around and assume that your husband’s advantage is higher than your own. So let’s say your own full retirement age is $ 1,800 per year. month and that your husband’s full retirement age is $ 3,000 per month. month. In this case, you will first take your benefits and then switch to widow benefits. Or to be more precise, you would apply for reduced retirement benefits at age 62. (This is the earliest that a retirement benefit can be paid.) You would receive about 75 percent of $ 1,800, or $ 1,350 a month. So, when you reach your full retirement age, you can switch to 100 percent widow benefits or $ 3,000 a month. (There are no “delayed retirement credits” paid on a widow’s benefit, so there would be no benefit to waiting over your full retirement age to collect widow’s benefits.)
And by the way, if these were your numbers ($ 1,800 for you and $ 3,000 in widowhood benefits), another choice would be to forgo this “widowhood” option and simply apply for widowhood benefits now. In other words, at age 60, you pay about 70% of $ 3,000 or $ 2,100 a month. And that would be to your advantage forever, except for future increases in the cost of living.
If you have a question about social security, Tom Margenau has a book with all the answers. It’s called “Social Security – Simple and Smart.” You can find the book on www.creators.com/books. Or look for it on Amazon or other bookstores.