My friend, 62, earns $20,000 a year. Should she take Social Security now — or claim survivor’s benefit at 67?
Short answer
– If the survivor benefit at 67 will be bigger than her own retirement benefit at 70: consider taking her own reduced retirement benefit now at 62, then switch to the full survivor benefit at 67.
– If her own retirement benefit at 70 will be bigger than the survivor benefit at 67: consider taking the survivor benefit first (as early as now at 62, or any time up to 67), then switch to her own at 70.
Why this works
– Widows and widowers are allowed to take one type of Social Security first and switch later. This is different from most spousal/retirement rules and is the key to maximizing a survivor’s outcome.
– Survivor benefits reach their maximum at the survivor’s full retirement age (FRA). For someone born in 1964, survivor FRA is 67. Survivor benefits do not grow after that.
– Your own retirement benefit grows with delayed retirement credits until age 70 (about 8% per year after FRA).
– So the usual play is: take the smaller benefit first while letting the larger one grow to its maximum.
Key rules to know
– Retirement benefit at 62: With an FRA of 67, claiming your own retirement benefit at 62 permanently reduces it to about 70% of your full amount.
– Survivor benefit timing: You can claim a survivor benefit as early as 60 (reduced), or wait until 67 (unreduced). The maximum early-claim reduction for survivors is up to about 28.5% at age 60; the reduction is smaller the closer you are to 67.
– Earnings test: Before FRA, benefits may be withheld if you earn above an annual limit. For 2024 the limit is $22,320 (it’s adjusted each year). At $20,000 of wages, she is below the 2024 limit, so no withholding would occur at that level. Check the current year’s limit before filing.
– Switching later: Taking your own retirement benefit early does not reduce a future survivor benefit you switch to later. Conversely, taking a reduced survivor benefit now does not reduce your own retirement benefit at 70.
– Taxes: Benefits may be taxable. With $20,000 of wages, adding Social Security could push her “provisional income” above $25,000 (single), making up to 50%–85% of benefits taxable. Many people in this range still face modest overall taxes, but it’s worth estimating.
– Health insurance: If she is under 65 and on an ACA marketplace plan, Social Security benefits count toward MAGI and can reduce premium subsidies. Factor this into the timing.
How to decide in practice
1) Get the numbers
– Create/open a my Social Security account and note:
– Her own estimated benefit at 62, 67, and 70.
– Her estimated survivor benefit at several ages, especially 62 and 67. (SSA can provide survivor estimates; the final amount may depend on the late spouse’s claiming history and the widow(er)’s limit rules.)
2) Compare “peak” values
– Which is larger: her own benefit at 70, or the survivor benefit at 67?
– If the survivor benefit at 67 is larger, taking her own at 62 and switching at 67 often maximizes lifetime value.
– If her own at 70 is larger, taking the survivor first and switching at 70 often wins.
3) Consider longevity and cash flow
– If she expects a long life, prioritizing the larger late-life benefit (survivor at 67 or own at 70) typically pays off.
– If she needs cash flow now and the earnings test won’t withhold benefits at $20,000 wages, starting the smaller benefit early can bridge the gap.
4) Run a quick breakeven check
– The “switch later” strategies usually breakeven in the late 70s to early 80s. If longevity is average or better, waiting for the larger maximum benefit often yields more lifetime income.
Two quick examples (illustrative, not her actual numbers)
– Example A: Survivor is larger
– Her own at 62: $980/month; at 70: $1,700/month
– Survivor at 67: $2,100/month (no growth past 67)
– Result: Survivor at 67 is bigger than her own at 70. Strategy: claim her own now at 62, collect $980/month while working (under the earnings test limit), then switch to the $2,100 survivor at 67.
– Example B: Her own is larger
– Her own at 62: $1,100; at 70: $2,000
– Survivor at 67: $1,750
– Result: Own at 70 is bigger. Strategy: claim the survivor benefit first (could be at 62 in reduced form if cash is needed), then switch to her own $2,000 at 70.
Other factors to keep in mind
– Remarriage: Remarrying before age 60 generally ends eligibility for a survivor benefit based on the late spouse; remarrying at 60 or later preserves it.
– Widow(er)’s limit: If the deceased spouse claimed early, the survivor benefit may be capped, but there’s also a minimum floor (generally at least 82.5% of the deceased spouse’s full benefit). SSA can clarify the exact amount.
– Continuing to work: Each additional working year can slightly raise her eventual retirement benefit if it replaces a low-earnings year in her 35-year record.
– COLAs: Both retirement and survivor benefits receive annual cost-of-living adjustments.
A likely rule of thumb for your friend
– If her late spouse had a much higher earnings record than she did, odds are the survivor benefit at 67 will be the larger “forever” check. In that common case, taking her own benefit now at 62 and switching to survivor at 67 is often the best path.
– If her own earning record is strong enough that her age-70 retirement benefit will exceed the survivor benefit at 67, then taking the survivor first and switching to her own at 70 is often optimal.
Step-by-step next actions
– Confirm her exact estimates for own benefits at 62/67/70 and survivor benefits at 62/67 (SSA account or local office).
– Check the current-year earnings test limit and her expected earnings.
– If under 65 on ACA coverage, estimate how claiming now affects subsidies.
– Do a quick tax projection to avoid surprises.
– File specifically for the benefit you want now (retirement or survivor), not both, and note the planned switch date.
– Revisit the plan annually in case work, health, or finances change.
Bottom line
At $20,000 in wages, the earnings test likely won’t reduce her checks. The smartest path is usually to start the smaller benefit first and switch to the larger one when it reaches its maximum (survivor at 67 or her own at 70). Which benefit is larger at its peak determines whether she should claim her own now and switch to survivor at 67, or claim the survivor first and switch to her own at 70.
