The survivor can start collecting survivor benefits at age 60, but the amount will be reduced for each month the survivor collects before reaching full retirement age, which is gradually being raised to 67. Also benefits end if the survivor remarries before the age of 60, unless that marriage ends in divorce. To collect survivor benefits, a marriage must have lasted nine months unless a minor child is involved, then the child is entitled to benefits.
If the survivor has her own earning record but the survivor benefit is more, she can collect the survivor benefit while letting her own benefit grow until the maximum of age 70. If and when her benefit exceeds the survivor benefit, she can switch and start collecting under her own higher benefit amount.
The same limits apply to a survivor collecting benefits but continuing to work that apply to a primary beneficiary who collects while working. Generally, $1 is deducted from the benefit for every $2 dollars earned over a certain limit until the person reaches full retirement age. The limit for 2012 is $14,640.
A divorced spouse also can collect survivor benefits if the marriage lasted 10 years. The same age limits and limits for working while collecting apply. The surviving former spouse has the option of collecting the survivor benefits, while letting her own benefits grow until she reaches age 70 and then switching if her benefits are higher, the Social Security Administration says.
A major difference exists for the deceased's earnings credits when calculating survivor benefits. Normally, a person needs 40 earnings credits, which takes about 10 years to accumulate, in order to be eligible for Social Security benefits. However, the children and the surviving spouse who is caring for the children can receive benefits if the deceased accumulated six credits during the three years before his or her death.
Disabled surviving spouses can collect starting at age 50 but the benefits will be reduced by 28.5% from what they would be if she had waited until full retirement age.
The surviving spouse can collect 50% of the deceased's benefits if he or she is caring for children under the age of 16 and the children can collect benefits in their own right if they are under 18, or age 19 if they are still in high school.
A child can be considered in a person's care, and therefore the caretaker is eligible for benefits even if the child is not living with the survivor, as long as the caretaker is exercising parental control over the child under the Social Security guidelines.
Dependent parents also can collect a portion of the deceased's benefits if they were dependent on the breadwinner for support. There is a limit to survivor benefits that can be collected for the entire family, generally between 150 percent and 180 percent of the deceased's benefit amount. The amount is divided proportionally among the survivors.
"This is an incredibly complicated subject even for someone in the financial business," Parker says. "A financial advisor should refer to the Social Security office or Social Security Web site to make sure everything is being considered so that the client gets his or her full benefits."
-Karen DeMasters