Social Security Claiming: The Case of the Widowed Late Boomer
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: Widowed Late Boomer With a Sizable Survivor Benefit
Carl is a single taxpayer whose wife died after generating her own substantial earnings history, leaving him eligible for widower benefits.
Carl has the option to file for benefits as a widower and then switch to his own work record later — no later than age 70 — or file on his own work record before his full retirement age and take the survivor benefit at his full benefit age.
Carl’s full retirement age is 67, having been born in June of 1962. His personal work history gives him a full retirement age benefit of $2,244, while his survivor benefit is valued at $1,886. Finally, he has an actuarially projected death age of 85.
With this set of conditions, Carl has as many as five distinct claiming scenarios to consider, and the jump in projected lifetime benefit payments between the least and most optimal claiming strategies is about $225,000.
What the Numbers Say
According to the authors, the least optimal claiming approach would have been for Carl to file in January 2024 at age 61 for a reduced survivor benefit of $1,472. He would then file in July 2024 at age 62 for his own reduced worker benefit of $1,580, resulting in a total lifetime projected benefit amount of $473,352.
A better approach would be for Carl to file in July 2024 for his own reduced worker benefit ($1,580), but he would wait until June 2029 to file at age 67 for his full survivor benefit of $1,886. This would increase the projection to $536,430, an approximately $60,000 jump in benefits.
An even bigger projected benefit increase comes from assuming Carl waits until June 2029 to file at age 67 for his full survivor benefit ($1,886). Assuming he also waits until June 2032 to file at age 70 for his maximum worker benefit amount of $2,782, this would result in a significantly larger projected lifetime benefit of $621,514.
The second most optimal approach sees Carl file in January 2024 for his reduced survivor benefit ($1,472) and in June 2029 for his full worker benefit ($2,244). This results in another $2,000 in projected lifetime benefits, for a total of $623,020.
Finally, the optimal approach: Carl files in January 2024 for his reduced survivor benefit amount of $1,472, but he waits until June 2032 to file for his maximum worker benefit of $2,782. This blended strategy boosts the benefit by another $75,000, for a total projection of $702,290.
