Social Security - Survivor Benefits

Social Security remains a hot topic - both with the national media as well as within our practice.  As we continue to discuss Social Security with clients, there is one area receiving increased attention - Survivor Benefits.

And with good reason: statistics indicate that the poverty rate for elderly widows is three to four times higher than that of their married counterparts.  Without a doubt, widowhood typically causes a decline in economic well-being for the surviving spouse.

Social Security Spousal Benefits Part 3: Restrict the Scope Strategy

As we continue our series on Social Security, we'll next look at a strategy referred to as "Restrict the Scope."  It is recommended you first read our posts on Social Security, Spousal Benefits and File and Suspend before continuing.

As with File and Suspend, Restrict the Scope refers to a filing strategy used by married couples to maximize their Social Security benefits.  It is often mentioned when both spouses have similar earnings records, but has many more practical applications.  In fact, Restrict the Scope is generally much more utilized than File and Suspend.

To review, briefly, everyone is entitled to a Social Security benefit based on their own earnings record.  As a spouse, you are also entitled to benefits based on your partner's earnings record equal to a maximum of 50% of their Primary Insurance Amount (PIA).  Simply put, you receive the greater of your benefit or the Spousal Benefit, but not both.  Your spouse must file for Social Security themselves in order for you to receive Spousal Benefits.

Social Security Spousal Benefits Part 2: File & Suspend Strategy

In our recent posts, we've provided some basics on Social Security and Spousal Benefits.  Armed with that information, let's start taking a simple look at some strategies that may allow married couples to more effectively maximize their lifetime Social Security benefits.  We'll begin with a strategy often called "File and Suspend." (If you haven't read the previous posts, you are encouraged to do so first before reading on.)

As we’ve already noted, you are always entitled to a Social Security benefit based on your own earnings record. As a spouse, you are also entitled to a benefit based on your partner’s earnings record, up to half of their Primary Insurance Amount (PIA), called a Spousal Benefit. (You receive the greater of your own benefit or half of your spouse’s, but not both.) However, in order for you to receive a Spousal Benefit, your spouse must have filed for Social Security benefits themselves. (Note: This is not the case when claiming on an ex-Spouse, but that’s a topic for another post.)