Widow benefits are indeed complex and have options available that other benefits do not.
This is one of the areas where BIG mistakes are made due to lack of knowledge regarding the rules and regulations in place. With that being said, we will try and explain some of these additional options. First, widow/widower benefits (Survivor benefits) are available at age 60 or 50 if disabled; other benefits start at age 62. If you start drawing these benefits at an earlier age, there will be reductions attached to your decision.
Available to you are the Survivor benefit and your benefit if you have the required 40 quarters. It is paramount that you know which benefit to take first. Also, if still working, you will be hit with the Earnings Limitations rules that lives with you until your Full Retirement Age. This rule limits your income to $18,920 (2021) without being subject to a penalty, that could, in turn, potentially eliminate any Social Security benefit. And if you have filed, you have locked in your amount regardless of the income.
If you take the Survivor Benefit at age 60, it will immediately be reduced by 27.5 percent – at Full Retirement Age you will be eligible for 100 percent. Now, this rule has an exception if your spouse started drawing his/her benefit prior to Full Retirement Age. Although the Survivor Benefit would normally be limited to the amount your spouse claimed before death, this exception (Minimum Widow’s Benefit) would allow you to draw the larger of what the deceased worker was collecting or 82.5 percent of the Full Retirement Age amount. This could be a big difference in your monthly income. This benefit is computed using the WINDEX computation at the Social Security office.
Widows who are eligible for both a widow benefit and a retired-worker benefit can claim one benefit initially and then claim a higher one later. For example, a widow can claim a widow benefit at age 60 and wait to claim a retired-worker benefit (with DRCs) at age 70. In this case, the widow would be a widow beneficiary initially and then only a retired-worker beneficiary. As another example, a widow might claim only a retired-worker benefit at age 62 and then claim an unreduced widow benefit at the FRA of 66. The widow, in this case, would initially be only a retired-worker beneficiary, but then would become a dually entitled widow beneficiary.
A Survivor Benefit does not qualify for Delayed Retirement Credits, but your own benefit does if drawn after Full Retirement Age. So, here is where the decision making takes place – take my benefit or Survivor Benefit? Work or not work? Just work and not file yet ... you need to know ALL the rules before making an intelligent filing decision.