What is the “Widow Limit?”
The “widow limit” rules apply in situations where the higher earning spouse took their benefits early, such as at the age of sixty-two. When someone takes their retirement benefits at age 62, they only receive 75% of their benefit if their full retirement age (FRA) is sixty-six, only 70% if their FRA is sixty-seven. That is a substantial reduction, and it is a permanent reduction for the retiree. The “widow limit” can result in the surviving spouse getting a slightly higher survivor benefit than their actual “number holder” spouse received while alive. Of course, if the survivor has a higher personal benefit, even though they took it at 62, they receive the higher amount.
When a spouse passes away, the surviving spouse can only receive the higher of the two benefits received as a married couple; the smaller benefit ends. The standard rule says that you can take your survivor benefits as early as age 60 (50 if disabled), but you will only receive 71.5% at that time, and it is a permanent reduction. If you wait until your FRA, you will receive 100% of the amount of your deceased spouse’s benefit at their time of death, including all cost-of-living increases since their death.
This is not the case if the deceased spouse took their retirement benefits early causing the “widow limit” to apply. The widow limit gives the surviving spouse a benefit equal to 82.5% of the deceased spouse’s primary insurance amount (or “PIA,” which is the deceased’s FRA benefit amount), and that can be achieved prior to FRA when the widow(er) reaches the age to receive that amount. For example, for someone born in 1960 with an FRA of 67 – under the widow limit the survivor reaches their largest survivor benefit amount at age 62 & 7 months, and it will no longer grow except for cost-of-living increases.
However, even though a surviving spouse affected by the widow limit may reach their largest survivor benefit amount sooner than their FRA, they will still be subject to an earnings limit until they reach their FRA. The earnings limit for 2023 is $21,240, and for 2024 will be $22,320. For further information contact the AMAC Foundation Social Security Advisory Service
Email: [email protected] or call (888)750-2622
By the AMAC Foundation Social Security Advisory Team.