Retirement Income Toolbox

March 15, 2018

The following is a summary of an article from Investment News .com Feb 2018 by Mary Beth Franklin.  I think some of the information is still valuable to certain individuals.

Social Security underpaid widows
82% of dually entitled could have switched to higher benefit

According to a recent audit report from the Social Security Administration’s Office (Valentines Day 2018) of the Inspector General, the Social Security Administration does not have adequate controls to inform widows and widowers of their option to claim survivor benefits initially and delay applying for their own retirement benefits until age 70, when those benefits would be worth more than their survivor benefits.

Based on a random sample the inspector general found that 82% of current beneficiaries who are dually entitled to survivor benefits and their own retirement benefits would have received a higher monthly benefit amount if SSA had informed them of the option to delay their retirement application until age 70.

Normally, when someone claims Social Security benefits, the application covers all benefits for which the claimant is eligible unless he or she specifically limits the scope of the application.

The Bipartisan Budget Act of 2015 limited the ability to claim only spousal benefits to those people born before Jan 1, 1954.  But the law did not alter the ability of surviving spouses and eligible surviving ex-spouses to make separate claiming decisions for their retirement and survivor benefits, regardless of when they were born.

Retirement benefits increase 8% per year for every year they are delayed beyond full retirement age up to age 70.  Survivor benefits do not.

It is not the first time the Office of the Inspector General identified this problem.

In a 2017 report, SSA was criticized for not awarding survivor benefits soon enough.

The report issued Feb 14 focused on widows and widowers who are being underpaid.  It identified 13,564 widows and widowers currently receiving survivor benefits who were dually entitled to widow's or widower's benefits and retirement benefits before age 70.  From this population, the office selected a random sample of 50 beneficiaries.

Of 50 beneficiaries, 41 – 82% of the sample – were eligible for a higher monthly benefit amount had they delayed their retirement application until age 70.

We suggested that those considering turning on their Social Security benefits take the time to research all of their options to ensure they are getting the highest benefit that they are entitled to. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized Social Security advice. We suggest that you discuss your specific issues with someone that is qualified to give Social Security advice.