MONEY Social Security

The Best Way to Claim Social Security After Losing a Spouse

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q. My husband recently passed away at age 65. I’ll be 62 in July, and I’m working full time. I went to the Social Security office and was told I could file for survivor benefits now, but would lose most of the income since my salary is about $37,000 a year. They told me to wait as long as possible to start collecting. My own Social Security benefits would be about $1,200 per month at 62, but since I’ll keep working, I will forfeit most of it. I don’t want to give up most of the benefits. But if there’s money I can collect until I turn 66, I’d like to get it. —Deanna

A. Please accept my condolences at the loss of your husband. I am so sorry. As for your Social Security situation, let me explain a few things that I hope will make your decision clearer.

First off, it’s true that the Earnings Test will reduce any benefits you receive before what’s called your Full Retirement Age (66 for you). However, these benefit reductions are only temporary—you do not forfeit this income. When you reach 66, any amounts lost by the Earnings Test will be restored to you in the form of higher benefit payments.

The real consequence of taking benefits “early”—before your FRA—is that the amount you receive will be reduced. There are different early reduction amounts for retirement benefits and widow’s benefits.

That said, you can file for a reduced retirement benefit at 62 and then switch to your widow’s benefit at 66, when it will reach its maximum value to you. This makes sense if you are sure that your widow’s benefit will always be larger than your own retirement benefit; more on that in moment.

One caveat: if you take your retirement benefits early, the restoration of Earnings Test reductions probably will be lost to you once you switch later to a widow’s benefit. But if the widow’s benefit is larger anyway, this should not bother you.

To find out more precisely what you’ll get in retirement benefits, set up an online account at Social Security—you’ll see the income you’ll receive at different claiming ages. To get the comparable values of your survivor’s benefit as a widow, however, you will need to get help from a Social Security representative.

Once you see those numbers, it could change your thinking. For example, what if your own retirement benefit is larger than your widow’s benefit? It could happen, especially if you defer claiming until age 70 and earn delayed retirement credits. In that scenario, you would do better to claim your widow’s benefit—and perhaps even take it early if you need the money. You can then switch to your retirement benefit at age 70.

These claiming choices can be very complicated. Economist Larry Kotlikoff, who is a friend and co-author of my new book on Social Security, developed a good software program, Maximize My Social Security ($40), which can take all your variables and plot your best claiming strategy. But I’m not trying to sell his software, believe me; there are other programs you can check out, which are mentioned here. Some are free, but paying a small fee for a comprehensive program may be worth it, when you consider the thousands of benefit dollars that are at stake.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: What You Need to Know About Social Security Survivor’s Benefits

MONEY Social Security

What You Need to Know About Social Security Survivor Benefits

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q. My husband is 10 years 4 months older than me. He began drawing his Social Security benefits at 65 and 10 months. I will be 62 next month. My benefits will be less than his since he was the larger wage earner. Based on statistics, I am likely to outlive him. We don’t need my benefits now so we could wait. But since it’s likely he will pass away first, and I will get his benefits because they are higher, is there any reason to wait to draw my benefits? —Lynda

A. First off, I hope you both live forever. But in the interest of being practical, you need to choose the Social Security strategy that will give you the highest amount of income over both your lifetimes, based on your expectations for longevity. Here’s what to consider:

If, as you say, your husband’s Social Security benefits are much larger than your own, then you will be receiving spousal benefits while he is still alive and survivor benefits after he dies. So you and your husband should figure out the strategy that will provide the best balance of current and future income.

Your spousal benefits will be 30% larger if you wait to take them until 66, which is what Social Security defines as Full Retirement Age (FRA) for you. (This age will rise from 66 to 67 for people born after 1954.)

So your decision is whether to take reduced spousal benefits at 62 or wait four years to take them at age 66. I don’t know what these different amounts might be, but you and your husband can figure them out by signing up for online Social Security accounts that will let you see your projected benefits.

Your maximum spousal benefit at age 66 will be half of what’s called your husband’s Primary Insurance Amount, or PIA. This is half of what he was entitled to receive at his FRA, and from your description, it sounds like that’s when he began taking benefits.

For example, let’s assume your spousal benefit at age 66 will be $1,000 a month. Then, at 62 you will receive only $700 a month, because of the 30% early filing reduction. Even at a reduced level, this will total $8,400 a year, or $33,600 from age 62 to 66. If you waited until age 66 and thus qualified for the larger spousal benefit, you would be getting $300 more each month.

Given these amounts, it would take you 112 months to recoup the $33,600 you would have received by taking benefits early. Your husband would need to live to more than age 86 for this deferral strategy to just break even in unadjusted terms. And this doesn’t reflect what economists call the present value adjustment of getting that $33,600 many years earlier than your full spousal benefit.

Your survivor benefit will be the actual benefit your husband was receiving when he dies, or in your case twice your spousal benefit. So you would want to contact Social Security and switch to this higher benefit as soon as possible after his death.

By the way, if your husband had deferred his retirement benefit from his FRA to age 70, his benefit would have been roughly 31.2% higher than he actually received. So, your widow’s benefit would have been even higher.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How to Use Social Security’s ‘File and Suspend” Option

MONEY Social Security

How to Use Social Security’s ‘File and Suspend’ Option

Q: Do I have to be 66 (my full retirement age) before I can file for Social Security benefits and suspend, or can I file at age 62, when first eligible, for my wife to start collecting? Second, I know that her spousal benefit is based on my earnings record. I plan to work to age 70 or longer so my earnings base will increase every year. Will the spousal benefit recalculate every year and increase accordingly. or is the spousal earnings base frozen at the time of filing? —Peter

A: You cannot file and suspend before 66—your full retirement age, or FRA for short. If you file sooner, you will have no choice but to begin collecting your retirement benefits. And if your wife files for spousal benefits before her FRA, she will be deemed under Social Security rules to also be filing for her own retirement benefit. Social Security does not pay full benefit amounts to people it considers “dually” entitled. Instead, it pays an amount that is roughly equal to the greater of the two benefits.

Spousal benefits are, indeed, automatically recomputed whenever your annual earnings are large enough to be included as one of the top 35 years of earnings during your life

I don’t know the age gap between you and your wife, or the difference in expected benefits based on each of your earnings records. But in the case of spouses of different ages, you should explore what happens if the younger spouse files for spousal benefits after the older spouse has reached FRA.

Under this strategy, the older spouse (I am going to assume here it is the husband) would file and suspend and let his benefits rise due to delayed retirement credits. As I noted earlier, the younger spouse will trigger her own retirement benefit if she files for a spousal benefit prior to FRA. Her benefits thus will be hit with early retirement reductions.

Still, getting these payments for several years may make sense to you. However, benefits will be greater if she can wait until her own FRA, at which point—because deeming ends at full retirement age—she then could file just for a spousal benefit and defer her own retirement benefit. It will be 76% higher at age 70 than age 62, and 32% higher at age 70 than age 66. If it winds up being larger than her spousal benefit, she can switch to it at age 70 (or even sooner if it makes sense given your income and spending needs).

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

More Social Security advice from Phil Moeller:
How Couples Can Boost Their Social Security Income
Here’s a Smart Strategy for Reducing Social Security Taxes
The Hidden Pitfalls of Collecting Social Security Benefits From Your Ex

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MONEY Social Security

How Couples Can Boost Their Social Security Income

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Robert A. Di Ieso, Jr.

Q. My wife and I started our Social Security benefits at age 62 in 2013, but we later realized that we needed more income. So, we are both going to look for jobs now. Can we stop our benefits if it looks like we are going to make more income than allowed, and start our benefits back at any time later? —Don

A. If you or your wife stop your benefits before either of you turn 66, you will simply be giving up Social Security income. The only way to increase your benefits is by suspending them at age 66, which is full retirement age (FRA) under Social Security rules; that age gradually rises to 67 for those born after 1954. At the point, filers can get higher income from delayed retirement credits by postponing claiming (more on that below).

That said, there are steps you can take to maximize your Social Security income. But the claiming rules for couples are a little complicated, so bear with me, as I walk you through the key decision points.

First, the basics. It is true that if you find new jobs, your additional income may temporarily reduce your Social Security benefits. If you go back to work in 2015, and either of you earns more than $15,720, Social Security will withhold $1 in benefits for every $2 above this earnings limit. (Make sure you understand how the Social Security defines earnings; here’s a brochure that includes this information.)

But these benefit reductions are not lost to you, just delayed. Once you reach FRA, they will be repaid to you in the form of a higher benefit that will last the rest of your life.

At age 66, the right to suspend benefits kicks in. During that time, the benefit will rise by 8% a year, plus the amount of any annual-cost-of-living adjustments. Claimants can restart the benefit at any time, but the delayed income credits max out after age 70, so there’s no advantage to waiting any longer than that.

The Pitfalls of Dual Benefits

You also need to consider the rules involving spousal benefits. Whether you realize it or not, one of you has already filed for these benefits. This is because both of you claimed your retirement benefits “early”—before reaching FRA.

The first spouse to file for retirement benefits will have been treated as filing only for those benefits. The filing by the first spouse enables the second spouse to claim spousal benefits. But that second spouse was “deemed” to be simultaneously entitled to dual benefits—their retirement and spousal benefits.

Very few married couples understand deeming, which ends at FRA. Because most people file for Social Security before reaching FRA, it’s worth going into some detail about the way it can affect benefits.

Under deeming, Social Security gives you benefits that are roughly the greater of the two benefits, spousal or retirement. If you were entitled to a spousal benefit of $1,000 at full retirement age, and an individual retirement benefit of $400, you would end up with about $700 at age 62—the $1,000 spousal benefit after the early retirement reduction. Of course, the agency has a more complicated way of arriving at the precise number. Here is a hypothetical example supplied by Social Security spokesperson Dorothy Clark:

“A person entitled to a reduced retirement benefit (RIB) on his or her own earnings and a reduced spousal benefit on his or her spouse’s record is dually entitled. The person will be paid on two separate records. The person will be paid the smaller benefit first on his or her own record plus the excess amount of the larger one on the spouse’s record totaling the higher amount.

“For example: A spouse at age 62 whose FRA is age 66 is entitled to a benefit of $1,000 before reduction. She is also entitled to a retirement benefit (RIB) of $400 before reduction. The full RIB is subtracted from the full spouse benefit. The excess ($600) is then reduced to $420. The RIB is reduced to $300. The total payable is $720, the sum of the reduced spouse excess and the reduced RIB. Additionally, since both payments are paid from the same trust fund, we will issue a combined payment.”

Although deeming ends at FRA, your benefits are permanently reduced by your decision to file early in 2013.

Suspending Benefits at 66

The spouse who was dually entitled to retirement and spousal benefits in 2013 has the choice of suspending his or her individual retirement benefit at age 66. But whether it makes sense to do this depends on the relative size of those benefits.

If your spousal benefit was greater than your retirement benefit, you can continue to receive the difference—the excess spousal benefit—after the retirement benefit is suspended. The suspended retirement benefit, meanwhile, will rise in value due to delayed retirement credits. Depending on the size of the retirement benefit, it may rise enough to surpass the amount of the dual benefit you were receiving. But if doesn’t, you should forget about suspending the retirement benefit at FRA—just continue to receive the dual benefit.

The spouse who was the first to file for retirement was, as I’ve explained, not considered dually eligible for two benefits. So if this spouse chooses to suspend benefits at FRA, he or she would be eligible to file for just a spousal benefit at that time. This would permit the retirement benefit to increase until it reaches the maximum amount at age 70. At this point, it would make sense to switch to that benefit, assuming it was larger than the spousal benefit.

Whether any of these scenarios make sense for you is, of course, depends on your need for current income and whether or not you can afford to defer Social Security benefits.

To figure out your best course of action, you can set up an account at “my Social Security” and run your actual benefit projections through Social Security’s calculators. (You also could plunk down $40 and get a wider range of claiming scenarios from Maximize My Social Security, a software program developed by economist Larry Kotlikoff, who is a co-author of our new book on Social Security.)

If this is all crystal clear to you, congratulations! Go to the head of the class! I still get confused by Social Security’s complicated rules and I write about them nearly every day.

Best of luck.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How Younger Spouses Can Get the Most from Social Security

MONEY Social Security

How Younger Spouses Can Get the Most from Social Security

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q. I was born in 1953 and will turn 62 this August. My projected Social Security benefit is $1,488 at age 62 and $1,974 at 66. My total family benefit ceiling is $3,508. My wife was born in 1970 and has never paid Social Security payroll taxes. She will begin working part-time this year but will probably never earn enough credits to claim her own retirement benefit. Our daughters are 14 and nearly 13.

I’m figuring that it is most advantageous to start my benefit at 62. I’m wondering if I will receive the Family Maximum Benefit or a lesser amount? Is my spouse eligible to receive benefits by caring for our minor children under my benefit? If I visit a Social Security office, will I get accurate information? —Michael

A. Let me take your questions one at a time.

First, I’m betting my definition of “most advantageous” might differ from yours. To me, it’s not just about putting the most dollars in my pocket but about insuring myself against living to a very old age (so I don’t run out of money) and making sure my wife will have the largest possible benefit when I’m gone.

Because your wife is nearly 17 years younger than you— and women typically live longer than men anyway— she is likely to outlive you by at least 20 years. Because she has no earnings record to speak of, you need to think about how she can receive the highest possible income in her old age.

The most effective way for you to do this is to delay claiming Social Security until you’re 70 in 2023. Of course, it may be that your family needs immediate Social Security income. But if you can wait until 70, your retirement benefit will be 76% higher than at age 62 and 32% higher than at age 66. This is due to early retirement reductions for claims prior to your Full Retirement Age (FRA)—66 for you—and delayed retirement credits between age 66 and 70. And these percentages are in “real,” inflation-adjusted terms.

When you die, your wife stands to receive your entire benefit for the rest of her life. That’s likely to be essential income, since, as you’ve said, she’s unlikely to qualify for Social Security on her own earnings record. So, if it was me, I’d break a leg trying to make sure she would be getting the maximum retirement benefit for all of those years.

Now, with apologies for possibly treading on uncomfortable ground, if you are still alive in 2032, she may want to begin taking reduced spousal benefits when she is 62, which is also as soon as she can. The benefits would be higher if she waited until she reached her FRA, which in her case is age 67 (unless Congress raises the FRA, which is possible). This would be in the year 2037, when you would be 84.

Your remaining life expectancy, according to actuarial projections, will be only a few years at this point. And it’s a safe bet that your wife will immediately switch to a widow’s benefit when you pass away. So she is almost certainly going to receive more total spousal benefits by claiming reduced benefits early than by waiting five years to claim a larger benefit.

The Family Maximum Benefit (FMB) is the total amount of benefits that you and your family members are entitled to receive based on your earnings record. But these benefits will most likely come into play when you’re no longer around. The FMB will include a widow’s benefit to your wife and, if your kids are still minors or disabled, and in her care, children’s benefits.

As for the accuracy of information provided by Social Security, I have never seen an independent study of this matter. Not surprisingly, the agency defends its record for providing accurate information. But, with something like three million requests for help every week, even a 1% error rate would mean that 30,000 people would be misinformed each week. To avoid being one of them, I’d seek information from multiple Social Security sources—online, over the phone and in person.

Best of luck.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: Here’s a Smart Strategy for Reducing Social Security Taxes

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Here’s a Smart Strategy for Reducing Social Security Taxes

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q. If I delay filing for Social Security until age 66, can I receive the benefit and continue to work? I’d like to draw Social Security benefits yet keep working until age 75. What are the tax implications of my strategy? —Steven

A. First off, you can always continue to work and draw Social Security benefits. Benefits are reduced temporarily if your outside income exceeds certain levels. But these reductions do not apply for benefits received at age 66 or later, which will be the case with you.

If you work and collect benefits, however, your increased income may push you into a higher tax bracket, which may mean your Social Security income may be taxed. If you haven’t already done so, go online to my Social Security and create an account. You will then be able to see your projected benefits at age 66.

To make an accurate estimate of your federal income taxes, keep in mind that not all of your Social Security income is taxable at the federal level. Social Security uses a measure it calls “combined income” to determine how much of your benefit is taxable, and it’s not intuitively obvious. So work through the numbers carefully—you may need to refer to your most recent tax return to make the calculation.

To determine your combined income, take your adjusted gross income (from your tax return), add any non-taxable interest income you’ve received in the past year, and then add half of your Social Security benefit.

If the total is less than $25,000 ($32,000 on joint tax returns), you will pay no income taxes on your Social Security benefits. If the total is between $25,000 and $34,000 ($32,000 to $44,000 on joint returns), you may have to pay taxes on half your Social Security benefits. People with higher combined incomes may have to pay taxes on 85% of their Social Security benefits, which is the maximum rate.

You also should consider if you can afford to live just on your salary and defer your own Social Security benefits until age 70. This will have two positive impacts:

First, delayed retirement credits will increase your monthly Social Security payments by 8% a year (plus annual inflation adjustments). If you defer for four years, your benefits will rise by 32% compared with their level at age 66.

Second, your tax rate likely will be reduced if you’re only receiving wage income from age 66 to 70. When you do stop working and rely more heavily on Social Security payments, your reduced income may translate into lower taxes on your Social Security benefits as well as a lower overall federal tax rate.

Lastly, if you are single and plan to stay so, you should consider filing and suspending your Social Security benefit at age 66. By doing so, you will have the option of going back to Social Security anytime before age 70 and requesting a lump-sum payment for all the benefits that were suspended. That could come in handy if you face an emergency cash crunch. But there’s a downside: if you request a lump-sum payment, Social Security will erase all your delayed retirement credits. Your lump sum will be valued as if you took benefits at 66, and this also will be the level of your regular monthly benefit going forward.

Even the best of plans could change if you run into financial or health problems, so preserving the right to get a lump-sum payment is a good idea for single persons. For someone who is or has been married, however, spousal benefits can be knocked for a loop if you file and suspend, so think twice about using this option.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How to Max Out Social Security Spousal Benefits

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How to Max Out Social Security Spousal Benefits

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Robert A. Di Ieso, Jr.

Q: My spouse and I are both 61½, retired in mid-2013, and have earned almost equal income for over 40 years. We can afford to wait to claim — but for how long, I don’t know. We would, of course, like to travel and have enough money to enjoy life while we are still “young,” since you never know what the future brings. That’s the gamble, isn’t it? I did call the Social Security Administration several months ago and a very nice woman gave me this advice: We should both file and suspend at 66, collect each other’s spousal benefits, and then collect our full amount at 70. Then when one of us dies, the other one will still have a maximum payment. Do you agree with that? Patti

A: I don’t agree with that advice, Patti. Let me explain why.

Social Security benefits are 76% higher if delayed to age 70 than if begun at age 62, but delaying benefits can seem like a gamble. As you noted, one never knows what surprises life will bring, or when, so many opt to take the money while they can best enjoy it.

But there’s a reason Social Security is called Old-Age, Survivors, and Disablity Insurance. And among all the changes in the years since Social Security was created in 1935, none has been more important for retirements than the tremendous longevity gains that people have experienced. Old age lasts much longer than it used to, and so should your money.

Many people look at the decision about when to claim benefits as a break-even analysis. How long must I survive to make waiting for higher benefits a winning proposition? We are wired to look at money this way. But if you can, think instead about Social Security as insurance for a very long life. Deferring benefits until they are at their greatest possible level makes a lot of sense when viewed this way.

As for Patti, the woman she spoke with at Social Security may have been very nice, but she did not provide very nice advice. It is possible for one spouse to collect spousal benefits while their own retirement benefit is deferred and rises in value. But two spouses cannot both do this.

The classic approach is for both Patti and her husband to wait to claim until they have both reached 66, which is their full retirement age under Social Security rules. At this time, the one with the larger retirement benefit would file and suspend his or her own retirement benefit, enabling the other spouse to file a claim for spousal benefits and receive half of the first spouse’s benefit. Then, at age 70, both would switch to their own retirement benefit.

This approach, as Patti noted, will not bring in any Social Security benefits for several years. If Patti and her husband need some retirement money sooner, an alternative approach is for one of them to file for retirement benefits now. The other spouse would do nothing.

Then, at age 66, the spouse who had filed at 62 would suspend benefits, allowing them to grow by 8% a year until age 70. The spouse who had done nothing could then claim a spousal benefit at age 66 and, at age 70, switch over to his or her own retirement benefit.

There are numerous other versions of this “start-stop-start” strategy that can optimize claiming choices for spouses between the ages of 62 and 70. This Maximize My Social Security software can run all the various scenarios for your situation and recommend the best option. (The company that makes it is run by Larry Kotlikoff, co-author of my book, but I don’t stand to benefit by recommending it.) The service costs $40 a year; given the stakes, I believe the price is well worth it.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com

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The Right Way to Claim Social Security Lump-Sum Benefits

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Robert A. Di Ieso, Jr.

Q. I have a question regarding collecting half of my Social Security benefit in a lump sum when filing a claim for the first time. Is this an option that you are aware of? If so, how does it work? I am not at retirement age yet, but would like to be prepared with all options when the time comes. — Mary

A. There are two types of lump-sum options available to you, but neither involves collecting half of your Social Security benefit. And both options are only available to those who have reached full retirement age, as defined by Social Security. That age is now 66 for people born between 1943 and 1954, and it will rise for people born later, eventually settling at 67 for anyone born in 1960 or after.

The first lump-run option applies to someone who delays filing for Social Security past full retirement age. In this scenario, you can decide to receive up to six months of your delayed benefits in a lump sum. Here’s how this works: If your full retirement age was 66 but you did not file for benefits until you were 66 years and six months of age, you could get your “missed” six months of benefits paid to you as a lump sum. If you filed later than this, however, you’d still only be able to get a maximum of six months of payments. And if you filed earlier—say, when you were 66 years and four months of age—you’d get a lump-sum payment that equaled only four months of missed benefits.

Keep in mind, collecting the lump sum may not be the best way to maximize your benefits. Because of delayed retirement credits, your monthly Social Security benefit rises by 8% a year (plus the rate of inflation) should you elect not to begin benefits at age 66. Deferred benefits will keep rising until you turn 70, when they will be 32% larger than if you began them at 66. So, while you could collect a six-month lump sum payment if you delayed filing until age 66-and-a-half, you also could simply file at that age for a monthly benefit that would be 4% larger for the rest of your life.

The second lump-sum option involves what’s called “filing and suspending” your benefits at age 66. This is usually done if you seek to preserve your full retirement benefit while making a spousal claim based on the earnings record of your husband or wife. But it’s also an appropriate strategy for single people who will only claim their individual retirement benefit.

When you file and suspend, you retain the right to collect a lump-sum payment for all the months during which your benefit is suspended. Say you plan to defer your Social Security until age 70, when your benefit reaches its highest value. If you file and suspend at age 66, you would be entitled to receive up to four years of suspended benefits in a lump-sum payment. Now, even if you never intended to collect Social Security until you turn 70, you might run into a health or financial emergency where the lump-sum payment makes a lot of sense. But if you had never filed and suspended, you would not be entitled to a lump-sum payment. The agency would just begin payments in whatever month you filed.

But this strategy has a downside: if you file and suspend and then later ask for a lump-sum payment of suspended benefits, you will lose your delayed retirement credits. That means your payments will be calculated based on the level of benefits you are entitled to at 66, not at the age when you ask for the lump-sum payment. And your future Social Security benefits will also be calculated as if you had claimed at 66, not later.

I know this is complicated. Please let me know if you have any other questions about lump-sum payments for Social Security.

Best of luck.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

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How Social Security Calculates Your Benefits

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Robert A. Di Ieso, Jr.

Q. Is it possible to obtain the inflation index that Social Security uses to adjust each year’s earning such that I could attempt to perform the overall calculation myself? I’m interested in knowing whether any of my earnings prior to 35 years ago are being counted in the index rather than the most recent 35 years’ worth. — Bob

A. Bob, you must have a masochistic streak! You can do what you suggest but it may wear out your calculator.

Social Security has a different index for every year! It is based not on prices but on wages. Basically, the agency adds up all the wages earned in the nation each year (there’s a two-year lag to get this data), divides them by the number of workers, and looks at how much wages per person have risen from year to year. The actual mathematical process is, of course, much more complicated.

These annual wage changes produce a set of indexing factors. The way these factors affect your own benefits is keyed to the year in which you first become eligible for benefits. For retirement benefits, this is 62. Entering this calendar year in an online tool will give you the annual indexing factors you can apply to your own earnings. Take your annual covered earnings (the earnings on which you pay Social Security payroll taxes), multiply it by that year’s index factor and you will obtain your indexed wage for each year you have worked.

Next, add up all these indexed wages and divide them by 35 to determine your average wage. If you’ve not worked 35 years, use zeroes for any missing year until you have 35 numbers. Finally, you need to find out what’s called your Average Indexed Monthly Earnings. So, multiply your 35 years of highest indexed earnings by 12 and then divide this total by 420 (the number of months in 35 years).

Your Average Indexed Monthly Earnings is the figure on which your retirement benefits are based. And it will change to reflect a new “top 35″ earnings year. If interested, the way the AIME determines your benefits is explained here.

If you have not given up by now, you also need to know that Social Security only indexes your wages until you are 60. For later years, it simply uses the actual amount of your covered earnings. For this reason, people who keep working in their later years will often see their benefits automatically recomputed upward to reflect a new top-35 year.

Clear as mud, right?

Anyway, that’s how it works. Or at least I think it is. Honestly, it is so confusing that even experts, including me, make mistakes.

Best of luck!

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How Your Earnings Record Affects Your Social Security

MONEY Social Security

The Right Way to Claim Social Security Widow’s Benefits

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q. I am 61 and was divorced from my husband two years ago after more than 16 years of marriage. He died a few months ago at 72 and had been receiving Social Security benefits of $1,663 a month. I am working part-time, earning $13,000 a year, and want to continue doing so. According to the Social Security calculator, my own retirement benefit would be $1,028 a month if I claim at age 62, $1,364 at age 66 (my full retirement age), or $1,800 at age 70. If I claim a (reduced) widow’s survivor benefit before age 66, I expect to receive $1,314 a month if I file now at age 61½ or $1,347 at age 62.

Can I apply just for my survivor’s benefits now, continue to work, apply for Medicare at age 65, and at age 70 file for my own benefits? Also, while receiving survivor’s benefits, would I need to apply for my own benefits at age 66 and suspend it until age 70; or can I continue to collect survivor’s benefits, with no need to apply and suspend at 66, and change to my own benefits at 70? — Elizabeth

A. This is an incredibly well-informed query, so, first off, kudos to Elizabeth for doing her homework and doing such a good job looking out for herself. The details she provides are essential for figuring out her best Social Security claiming choice.

The simple answer to her question—whether to claim survivor’s benefits now—is “Yes.” The reasons for this illustrate the complexity of individual retirement benefits, as well as the way benefits interact, which can increase or reduce your Social Security income. This is a key issue for women, who tend to outlive their spouses and file the lion’s share of survivor claims.

The rules for widow’s (or survivor’s) benefits are different from spousal benefits, which involve claims on a current or divorced spouse. Survivor’s benefits may be taken as early as age 60, while spousal benefits normally can’t begin until age 62. Both benefits are lowered if you claim early, but the percentage reductions differ. That’s because survivors can claim up to six years before reaching their full retirement age (FRA), which is 66 for current claimants, compared with just four years for early spousal claims.

Another key difference is that survivor benefits do not trigger deeming when taken prior to full retirement age, which can be a real headache. If you are eligible to file for a spousal benefit and do so before age 66, Social Security will deem you to be also filing for your own retirement benefit. It does not pay two benefits at the same time but will give you an amount roughly equal to the greater of the two benefits. Further, once your retirement benefit has been triggered early, it will be permanently reduced.

The good news is that deeming does not apply to survivor benefits. So Elizabeth can file for a widow’s benefit right away and not trigger a claim for her own retirement benefit. Because it’s likely her retirement benefit will be higher at age 70 than her widow’s benefit, she should plan on taking the widow’s benefit as soon as possible. At age 70, she can switch to her retirement benefit .

She is correct that she will be hit with an early filing reduction. But given the small increases she would receive if she waited, the benefit of deferring is outweighed by the gains of claiming now. That’s because she will get more years of benefits, so the cumulative amount of income will be greater.

The modest earnings she receives won’t be a factor either. “Since her earnings are below the 2014 annual earning limits, she could qualify for widows benefits beginning this month with no loss of benefits due to the earnings test,” says James Nesbitt, a Social Security claims representative for nearly 40 years who now provides benefits counseling for High Falls Advisors in Rochester, NY.

“Depending on her past work history, her continued contributions into the Social Security system by working may have the effect of increasing her monthly benefit amount,” he adds. “The online retirement calculator on Social Security’s website will allow for future earnings to be used in estimating benefits.”

Elizabeth should set up an appointment now at a local Social Security office in order to begin receiving benefits as soon as possible, Nesbitt adds. If she files for her survivor benefit before age 65, Social Security should automatically enroll her in Medicare.

Further, Nesbitt notes, the precise amount of her survivor’s benefit depends on when her late husband filed early for his retirement benefit. This, like much else about Social Security, can be very complicated. But if his $1,663 benefit was the result of an early retirement filing, her actual survivor’s benefit could end up being much higher than she estimates. She should review this possibility when she meets with the agency to file her claim.

Lastly, she should not file and suspend her own retirement benefit but simply collect her survivor’s benefit and then claim her own retirement benefit at age 70. “Once a retirement claim has been filed at 66, albeit suspended, the amount of the widow’s benefit will be calculated as if she is [also] receiving the retirement benefit,” Bennett notes. “A ‘file and suspend’ would reduce or possibly eliminate the widow’s benefit.”

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: The Best Way to Tap Your IRA in Retirement

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