Ask the Experts!
The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers. Here’s the question of the day.
Question: Can my client file for survivors benefits now, at age 64, and switch to her own retirement benefits later at age 70, earning delayed retirement credits (DRCs)?
Answer: Yes, a surviving spouse may file for survivor benefits at age 64 and switch to her own benefits later.
This allows her to receive her survivor benefits immediately without it adversely affecting her own future retirement benefits, even if she hasn’t yet reached full retirement age. Keep in mind, however, that since she has yet to reach full retirement age (FRA), the survivor benefits would permanently be reduced. But this wouldn’t be much of an issue if she’s planning on switching over to her own retirement benefits at age 70.
This technique allows the surviving spouse access to Social Security funds now—the survivor benefits—while allowing her to continue to earn DRCs, increasing her own Social Security retirement benefits by 8% per year until she reaches age 70.
This technique is similar to the restricted spousal benefit technique, which we discussed here and here. However, to receive spousal benefits now and switch to your own benefits later, the spouse must have already reached FRA, which isn’t a requirement for the survivors switch technique discussed in this entry.
Have a question for the professionals at AUC? Feel welcome to submit it by email. We may post your question and the answer as the question of the day.