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Social Security tips: maximizing survivor benefits

Maximizing Social Security survivor benefits is crucial for couples in their golden years. TODAY financial editor Jean Chatzky explains why.
/ Source: TODAY

L.L. Bean boots. An original Kitchen-Aid mixer. Your trusty old Honda accord. All are items on the list of things with the potential to outlive you. Add to that your Social Security benefits. Under the current system – thanks to spousal and survivor benefits – it’s very possible that your benefits will last longer than you do.

Third of three parts

“It’s important to maximize the Social Security benefits you get today but it’s also really important to maximize survivor benefits,” says Mary Beth Franklin, a Social Security expert and contributing editor to InvestmentNews. That’s why it’s crucial to consider your spouse and survival benefits whenever you make any Social Security decision.

What do I need to do now?

Delay if you can. Many couples will want to delay the higher earner’s payout until age 70. The reason? The surviving retired spouse will receive 100 percent of those higher benefits for the rest of his or her life. Plus payments are adjusted for inflation.

If you become a widow or widower there are other decisions to keep in mind. You are eligible for survivor benefits at age 60, although you receive a reduced amount if you apply before full retirement age of 66 or 67 (depending on when you were born.)

What if I’m divorced?

Also if your divorced spouse dies, you are eligible for benefits if you were married 10 years or more. However, rules vary if you are remarried. Generally if you remarry before age 60 you are no longer eligible for ex-spouse survivor benefits.

Any last-minute tips?

If delaying your own benefit to age 70 would exceed the amount of your survivor benefit, you may want file for the survivor benefit first then switch to your higher payment at age 70. Or, if your benefit is smaller and you need income, you may want to start your payments early, say at age 62, then start taking the larger survivor benefit when you reach full retirement age. There will be no reduction in the survivor benefit if you take your own Social Security early.

Part 1: Pad your pocketbook with 'file and suspend'

Part 2: When to use restricted application for spousal benefits