Delaying Social Security boosts widow's finances

I'm 66 years old. My wife is 65. I'm thinking of postponing Social Security until I'm 70. If I die after age 70, will she get the amount I received at 70, or will she receive what I'd have received at 66? I'm getting conflicting answers.

You've hit on an excellent way to provide your wife with extra financial security. As your widow, she gets 100 percent of what you were eligible to receive when you died — a dollar amount that's almost one-third greater if you delay collecting Social Security until you're 70.

When you don't start taking Social Security until after your full retirement age (in your case, 66), your benefit earns an 8 percent annual credit for up to four years of delay. At 70, it's 32 percent bigger than if you take it at 66. And the longer you live, the more you gain from that initial 32 percent boost, thanks to the effects of compounding and Social Security inflation adjustments. During your lifetime, your spouse's maximum benefit based on your work record is 50 percent of your benefit at age 66. But after you die, she receives 100 percent of your benefit.

What if you postpone Social Security and die before you're 70? Your widow gets 100 percent of what you were entitled to receive, even if you weren't yet collecting it. Moreover, the 8 percent annual credits for delaying your application accrue in monthly installments. So if you die at 671/2 — or if you decide to apply for Social Security at age 671/2 instead of waiting until you're 70 — her survivor's benefit will still be 12 percent larger than if you had filed for Social Security at 66.

The bottom line: Your spouse's survivor benefit includes any extra credits you earned for a delayed Social Security application.

More information: aarp.us/pq7VtJ and 1.usa.gov/qRBwWD