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Q&A: "I am a 61 Year Old Female who Receives Social Security Disability. My Husband is Also 61. If he Takes his Social Security at 62 and Receives a Reduced Amount, is he Able to Switch to Survivor Benefits (Which are Higher) Upon My Death?"

Social Security

Question and background: 

I am a 61 year old female who receives social security disability. My husband is also 61. If he takes his social security at 62 and receives a reduced amount, is he able to switch to survivor benefits (which are higher) upon my death? I am a five time cancer survivor. It is likely that he will survive me, and it would appear he could switch after age 66 -- is that correct?

Larry's answer: 

Never before have I heard of someone who's stared cancer in the face and kicked it five times. You're very courageous and I salute you!

You've raised an interesting and complex question. I'll share here my general take on the rules and how they apply to your situation. But you folks should seek out an advisor who specializes in social security to run scenario projections using your actual benefit amounts. Quantifying it like that will help you make the best decision. 

First, some basic rules and assumptions . . . .

  • I'll use "SSDI" when referring to your social security disability benefits and "SS" when referring to regular social security benefits.
  • You must have been married for at least nine months in order for your husband to collect survivor's benefits under your SSDI in the event you die before he does. I assume you folks meet that criteria.
  • Your SSDI will automatically convert to regular SS when you reach Full Retirement Age (FRA) of 66.
  • Early election by your husband of either (a) his own SS benefit or, if you die before age 66, of (b) survivor benefits under your SSDI will result in a permanent reduction in either benefit.
  • Your husband can elect to receive his own SS benefit as early as age 62. That would result in a permanent reduction (of his own benefit) to the 75% level. Of course, that reduction tapers the longer he waits to collect until FRA of 66.
  • A widower can receive benefits under their deceased spouse's SSDI as early as age 60. Early election results in a permanent reduction of benefits between 71.5% to 99%, depending on when the widower starts receiving them. Electing to receive a deceased spouse's SSDI benefit at age 62 would be around the 81% level. Note the differences (age and percentage) in early election of a survivor benefit vs. one's own SS benefit.

I hope you continue kicking cancer but, as you indicated, the odds are stacked against you living longer than your husband. So if his health and anticipated longevity are good, it makes sense to try to get his SS/survivor benefit as high as possible. 

Here is how I see the rules applying to different scenarios:

1) If your husband collects his SS at 62 and you die before 66, your husband can:

  • choose the higher of (a) his own reduced benefit or (b) a reduced SSDI benefit amount, or
  • continue his own reduced benefit until age 66 and then switch over to the full survivor benefit (your SSDI amount)

2) If you die before 66 and your husband waits to collect benefits until he's 66, he'll then receive the higher of (a) his own non-reduced SS benefit, or (b) your non-reduced SSDI benefit (which will convert to SS). I believe you indicated that your benefit is higher than his, so this claiming strategy may be moot. 

3) If you live beyond 66 and your husband waits to collect benefits until he's 66, when you die your husband will receive the higher of (a) his own non-reducedbenefit, or (b) your non-reduced regular SS benefit. Recall that your SSDI will convert to SS at your age 66. Should be basically the same amount. 

Depending on your other income sources and assets--and your husband's health and anticipated longevity--if you live beyond age 66 it may make sense for your husband to file a Restricted Application for Spousal Benefits only (50% of your benefit) at his age 66. Then he could let his own SS continue to grow in size for as long as you live, collecting no later than his age 70 (when it would be 132% of his age 66 benefit). This strategy may not be helpful if there's a verylarge gap between your SSDI benefit and your husband's SS benefit. But again, you'll want to quantify the scenarios using your actual social security benefit amounts to see the best options. 

I hope this is useful. Feel free to get in touch with any questions or if I can be of any help. All the best!

Originally posted on NerdWallet's Ask an Advisor on June 10, 2014.