When a spouse dies, the survivor is often presented with a host of financial decisions. It would be nice if decisions about Social Security were simple. I’m here to say: Sometimes they are. Sometimes they’re not.

It’s generally assumed that when one spouse dies, the surviving spouse collects a Social Security benefit equal to that of the recently departed or their benefit, whichever is higher. That’s often the case—but not always.

Consulting daily with financial advisors on client Social Security filing strategy, I’ve learned that deep in Social Security’s 2,700-plus regulations are rules that provide potentially surprising results for the recently widowed.   

Here’s an example: a financial advisor using advanced software to model Social Security options for a recent widow found that her survivors benefit was significantly higher than what her deceased had been collecting. The advisor questioned the accuracy of the software’s output. I dug in.  

It turned out that the husband had filed for Social Security benefits at age 62, so he was collecting a reduced benefit, lower than what his primary insurance amount (PIA) would have been if he’d waited to file at his full retirement age (FRA).

His widow had, at the time of his death, surpassed the age known as her survivor FRA. As a result, she was entitled to 82.5% of her husband’s PIA, which was higher than the reduced benefit he had been collecting.

Do you see? It’s easy to get tripped up by making assumptions about Social Security benefits. Let’s review a few more things that are good to know about survivors benefits so you can help clients at a stressful time.

Basic Facts And Things To Know About Survivors Benefits
Funeral homes usually ask for the deceased’s Social Security number and notify the Social Security Administration (SSA) of the death, so benefit payments are halted. Any benefits paid for months after the one in which a person dies must be repaid.

If an individual was collecting Social Security benefits, a surviving spouse needs to contact SSA directly—by calling or visiting a Social Security office—to arrange for survivors benefits. This cannot be done online.

A widowed spouse who has reached their FRA is entitled to 100% of what a deceased spouse was collecting at the time of death. The survivors benefit will, however, be less than 100% if the widowed spouse is between age 60 and full retirement age.

Choices May Turn On Whether A Widowed Spouse Is Still Working
Many couples today have two income earners. An eligible widowed spouse can take a survivors benefit and switch to their benefit later at full retirement age or later, taking advance of the boost in benefits provided by delayed retirement credits.

If a widowed spouse is still working, however, they could see their survivors benefit reduced if they earn more than the income limits set by the SSA. On the other hand, their earnings will accrue credits toward their retirement benefit.

In either scenario, the widowed spouse needs an advisor to walk them through their options and the financial implications of their choice.

Clients are often surprised that there’s no double dipping in Social Security. A widowed person is not entitled to the deceased spouse’s and their benefits. And that’s why a financial advisor wants to hit their Social Security planning software to determine how to maximize the surviving spouse’s benefit.   

By the way, it’s worth reading a helpful blog post published by Social Security, “Four Tips Widows Need to Know.”

Planning Social Security Filing Together Matters In Life And After Death
When to file for Social Security benefits are decisions that spouses should make together and always in consultation with their financial advisor. Why? Because …
• The age at which the deceased spouse started collecting Social Security affects a surviving spouse’s benefit, as the example above shows.

• If both spouses worked and accumulated Social Security credits, each is eligible for benefits. The software can model what each will receive by filing early (at 62), at full retirement age and later, at 70. That’s important, especially when working with an advisor on plans for retirement income.

• Both spouses need to be aware of what happens when one passes away. Decisions can turn on factors that include their ages (is one much older than the other?), their health and their other assets available for retirement income. 

Remember This …
Strangely, Social Security is an area many clients never consult with their financial advisors about, and often to their detriment. My advice to financial advisors is:
1. Ask clients early and often about their plans for Social Security. Many are eager to get the benefits they earned through years of hard work and paycheck deductions. They turn a blind eye to the financial benefits of delaying if they are secure enough to do that. Record cost-of-living adjustments last year may have convinced some that the immediate gratification of filing outweighs any benefit of waiting.   

2. Advise all clients not to make any choices about Social Security without their spouse and without taking a comprehensive view of their financial situation and expectations for retirement. Many people compare what they’ll earn per month at 62 or later—at their FRA or 70—and rationalize that it’s a “small” amount. Over the years, and with longer life spans, however, those differences can add up. 

Alyson Dorosky, CSSCS, is head of Social Security support at LifeYield. She works with advisors and their clients to address their thorniest Social Security issues.