This is the latest in a series of biweekly articles featuring Social Security claiming case studies drawn from the ALM publication "2024 Social Security & Medicare Facts," by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.
The Scenario: A Widow With Modest Earnings
Sandy is a widow approaching full retirement age. She must decide if she will take benefits from her own work record before full retirement age and then claim her widow's benefit at full retirement age — or take widow's benefits before full retirement age.
The claiming calculus in this situation is made less complex because the benefits on Sandy's work record will not exceed the widow's benefit even if she waits until age 70.
In the scenario, Sandy's full retirement age is 66 and 8 months — she was born in October 1958 — while her full benefit age for the widow's benefit is age 66 and 4 months. Her actuarially projected death age is just over 87.
Finally, the survivor benefit amount at full benefit age is $2,599, compared with her personal worker benefit of $1,425.
What the Numbers Show
Unlike many prior case studies showing that claiming decisions can vary by hundreds of thousands of dollars of projected lifetime benefits, this case has a fairly modest difference, about $20,000, among the three potential claiming strategies that are on the table.
The least effective approach would have seen Sandy file in January 2024 for a slightly reduced survivor benefit of $2,471. This would give her an anticipated payout of $647,350.
Sandy would get about $5,000 more in projected benefits if she waited for February 2025 to claim her full survivor benefit of $2,599 at age 66 and 4 months.
