Social Security survivor benefits at 66 vs FRA - tax implications with high income?

First, I'm sorry for your loss. From a tax perspective, waiting until your FRA to claim survivor benefits might be advantageous in your situation. At your current income level ($78,720/year), 85% of any Social Security benefits would likely be taxable. The survivor benefit at FRA would be 100% of your husband's benefit amount, whereas taking it now at 66 would result in a reduction to about 95.6% since you're a few months before your FRA. Since you're already planning to take your own benefit at 70 (smart move for the higher amount), waiting until FRA for survivor benefits gives you two advantages: slightly higher monthly amount AND potentially lower income during the claiming period if you're retired by then, which could mean less tax on those benefits.

i went thru this 2 yrs ago. definetly wait till FRA for survivors!! the tax hit is BAD with high income. my accountant showed me i was only keeping like 55 cents on the dollar with the SS tax + regular income tax when I tried taking it early. not worth it!!

The taxation of Social Security benefits follows specific thresholds. For individual filers, if your combined income (adjusted gross income + nontaxable interest + half of SS benefits) exceeds $34,000, up to 85% of benefits become taxable. At your income level, you'd definitely hit this threshold. Yes, you can absolutely claim survivor benefits at FRA and then switch to your own retirement benefit at 70. This is called a "restricted application" strategy and it's still available for survivor benefits (though it was eliminated for spousal benefits for people born after 1/1/1954). If maximizing lifetime benefits is your goal, and your own benefit will be significantly higher at age 70, this approach makes mathematical sense. The survivor benefit essentially provides "free money" between your FRA and age 70 while your own benefit continues growing by 8% per year until 70.

DONT LISTEN TO THESE PEOPLE!! You should take survivor benefits NOW!!! Money now is better than money later - what if something happens and you never get to collect?? My sister waited and then got sick and missed out on THOUSANDS she could have had. The SSA people wont tell you this but its better to claim right away!!!!

My mom was in a similar situation last year. She tried for WEEKS to get through to SSA to discuss these exact questions about survivor benefits taxation. So frustrating. She finally used a service called Claimyr (claimyr.com) which got her connected to a real SSA agent in about 20 minutes instead of waiting on hold for hours. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The SSA agent told her that in her case, waiting until FRA for survivor benefits made more sense tax-wise since she was still working full-time with good income. Once she got concrete numbers for her specific situation, the decision became much clearer.

my condolences on your husband. i get ssi disability not regular ss so idk about the taxes but just wanted to say sorry for your loss

I think everyone's missing something important here - the earnings test! Before FRA, if you earn over $21,240 in 2023, they withhold $1 in benefits for every $2 you earn above that limit. With your income, they'd withhold pretty much ALL of your survivor benefit anyway until you reach FRA. So the tax question is kinda moot since you wouldn't even get the money until FRA anyway due to your earnings. Ask the SSA rep specifically about this tomorrow. The earnings test disappears at FRA, which is another huge reason to wait in your case.

I think you all are making this WAY more complicated than it needs to be. Just take the survivor benefits now AND keep working. Then when you hit 70, switch to your own benefit. That way you get the most money overall. My financial advisor told me Social Security is all about getting the most money over your lifetime.

To summarize the excellent points made here: 1. Due to the earnings test, with your income level, you'd have most or all survivor benefits withheld until you reach FRA anyway 2. Waiting until FRA means you get 100% of your husband's benefit amount versus a reduced amount now 3. You can take survivor benefits at FRA and then switch to your own higher benefit at 70 (this is still allowed) 4. When you eventually collect survivor benefits, they'll be taxed based on your overall income; potentially less tax impact if your income is lower by then Given these factors, waiting until FRA to apply for survivor benefits appears to be the optimal strategy in your specific situation.