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Social Security Tips for Surviving Spouses

Knowing the rules now can lead to a bigger benefit later.

When it comes to claiming strategies, Social Security has been shaking up a lot of couples' plans (see Some Social Security Loopholes Will Still Be Around in 2016). But even though some of the strategies for claiming Social Security spousal benefits are changing, the rules for maximizing survivor benefits are not. A few key decisions can help you lock in a more generous payout -- and knowing how much you are eligible to receive will help you create a financial plan for when you or your spouse passes on.

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After your spouse dies, you have a choice: You can either get survivor benefits or receive benefits based on your own work history. You can't take both benefits at the same time, but you can take one type of benefit first and let the other grow, then switch to the higher payout later.

How big a benefit? The size of a survivor benefit is based on two factors: the amount your spouse had been receiving (or would have received) when he or she died, and your age when you take the benefit.

If your spouse dies after claiming Social Security, your maximum survivor benefit is generally the amount your spouse was receiving. The longer your spouse waits to take benefits, the larger his or her own benefit will be and, thus, the higher your survivor benefit.

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If your spouse dies before full retirement age and has not yet claimed Social Security benefits, the survivor benefit will be based on the amount he or she would have received at full retirement age. If your spouse dies after full retirement age but waited to sign up for Social Security to earn delayed-retirement credits, your survivor payouts are based on the amount your spouse would have received at the time of death.

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The second factor determining the size of your survivor benefit is when you choose to take it. You are eligible for the full amount your spouse was receiving if you claim it at or after your full retirement age (currently 66).

You can take survivor benefits as early as age 60, but the amount will be reduced based on the number of months remaining before your full retirement age. (There are special rules if you are disabled or if you are caring for a child younger than age 16.) Your survivor payouts may also be reduced if you take them before full retirement age and are still working.

No double-dipping. If you qualify for benefits based on your own work history, you can coordinate the timing of the two benefits to maximize your payouts over the long term. For ex­ample, you can take survivor benefits anytime after you turn 60 and let your own benefit grow to the maximum at age 70, then switch to your own benefit at that point, if it is higher. Or, if your own benefit is modest, you may want to start your own reduced benefit as early as age 62 and then switch to the survivor amount at full retirement age. (The survivor benefit does not continue to grow beyond full retirement age.) Taking your own benefit early does not affect the size of the benefit you can receive as a survivor.

"If you think you'll live past about age 80, delaying benefits as long as you can is probably the best answer," says Tim Steffen, director of financial planning for Robert W. Baird & Co., a wealth management firm. "Adding the variable of survivor benefits, however, may change that advice."

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