Laurence Kotlikoff is a professor of economics at Boston University who has been answering questions and writing columns about Social Security each week for the past two years on PBS NEWSHOUR’s website. OpenRetirement has asked Professor Kotlikoff to post a Q&A each day from those columns. He has also developed software, called Maximize My Social Security, to help retirees secure the highest lifetime Social Security benefits. You can find the software here: www.maximizemysocialsecurity.com
Question: I am 63 and working, widowed 20 years ago. My husband was retired and collecting Social Security. I did collect survivor benefits for our young son, but my own survivor benefits were suspended because I was earning too much.
Does it make sense for me to file now as a widow against my deceased husband’s account, and then switch to my own retiree benefits when I retire in two to three years? My current salary is $100,000. Thank you.
Answer: Very precise commercial software can tell you exactly what’s best, but my guess is that you should apply for your widow’s benefit as soon as you retire, and then at 70, apply for your own retirement benefit. If your earnings fall to the point that you won’t lose them all due to the earnings test, you should immediately apply for your widow’s benefit.
Your widow’s benefit will then be bumped up at full retirement age (66 in your case) based on any months of benefits lost due to the earnings test. This is done via the adjustment of the reduction factor.
You are making a high salary now, but that may not have been the case in the past. And your husband may have been a high earner before he passed away. So what’s best to do really depends on the exact details. With sophisticated software, you can also see whether continuing to work for more years will raise your lifetime Social Security benefits and, if so, by how much.
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When it comes to personal finance, economics and our software care about one thing—your living standard. All questions in personal finance boil down to your living standard. Your decision about when and how to take Social Security can affect your living standard throughout your retirement.
I am a professor of economics and I’ve spent a good part of my academic career studying personal financial behavior. Here’s why my colleagues and I developed Maximize My Social Security. Deciding, on your own, which Social Security benefits to take and in which month to take them is incredibly difficult. Most households face millions of options. You can easily lose tens of thousands of dollars making the wrong choices.
My company’s software, Maximize My Social Security, can help you avoid costly mistakes and instead discover your maximized lifetime household benefits.
