Dear Rusty: I am a 58-year-old widow, born in 1958. My husband, born in 1953, was collecting Social Security Disability benefits when he died, worked throughout his lifetime and had earned enough credits to be eligible for regular Social Security benefits had he lived long enough. I know I can start collecting survivor’s benefits at age 60, but I’m not sure if that’s smart because I’d like to keep working and I’m not sure if working would affect my widow’s benefits.

I should also mention that I don’t have the full 35 years working that Social Security uses to calculate my own retirement benefit amount, so I’m unclear about when or whether to consider switching from survivor’s benefits to benefits based on my own work record.

Please help me figure out the best way forward.

Dear Survivor: You already know that you’re not eligible for survivor’s benefits until you are 60 years old, and your plan to continue working after that does, indeed, add a wrinkle. While you will be eligible to begin survivor’s benefits at age 60, the benefit you receive will be reduced to 71.5% of what you would receive if you wait until your widow’s full retirement age (FRA). Note too that as a widow, your full retirement age is 4 months earlier than the normal FRA for someone born in 1958 – 66 years and 4 months vs. 66 years and 8 months for the normal.

In the immediate future I suggest you focus on eliminating some of those zero-salary years in your 35 year work record because they will reduce the Social Security benefit you will be entitled to. You said you want to continue working, and for each year you work now one of those zero years will be eliminated and your benefit amount from your own work record will increase. If working provides enough money to keep you financially comfortable, then delaying the start of your survivor’s benefit beyond age 60 will improve the reduction factor by about 4.5% for each year you delay, up to your FRA.

The actual amount of your survivor’s benefit will be based upon your deceased husband’s primary insurance amount (the amount of benefit he would have been entitled to at his full retirement age) and the age at which you apply for survivor’s benefits. Even if you are still working, there’s no advantage to waiting beyond your FRA to start survivor’s benefits because the maximum survivor’s benefit is reached at FRA. Whenever you apply for your survivor’s benefit you will need to apply in person at your Social Security office, and you should be specific that you are applying only for survivor’s benefits, not your benefits based on your own work record.

If you choose to start collecting survivor’s benefits early and continue to work, Social Security’s “earnings test” could affect your benefit. Except for the year in which you attain your FRA, Social Security will take back $1 for every $2 you earn above their annual earnings limit, which for 2017 is $16,920.

Unlike survivor’s benefits which stop growing at FRA, the benefit available from your own work record will continue to increase if you wait beyond your full retirement age to start collecting it. n fact, your benefits from your own work record will increase by about 8% for each year you delay beyond your FRA, until you reach the maximum at age 70. A prudent approach might be to continue collecting your survivor’s benefits until some years past your FRA (but not later than 70) and allowing your benefit from your own work record to grow. Provided your own benefit is larger than your survivor’s benefit, you can then switch over to the higher benefit. In any case, do not wait past your FRA to start your survivor’s benefit, nor after age 70 to start your own retirement benefits.

Dear Rusty: I am 64 years old, born in October of 1952, and in rapidly declining health. I took my Social Security early, as soon as I was 62, and now get $1838 per month in Social Security benefits (before Medicare premiums are taken out). My wife of many years also took her Social Security at age 62 and she gets $787 a month. From what I understand, when I pass away she will get my full benefit instead of what she gets now. I’m hoping that’s true because she won’t be able to make it with only $787 a month.

Dear Planning: First, you’re to be commended for planning ahead for that time when your wife will be left without you. Dealing with such a loss is devastating enough without adding a severe loss of income into the mix. Let me quickly put your mind at ease – once she reaches her full retirement age, your surviving spouse will get at least as much as your benefit amount, currently $1838 per month. This is known as her survivor’s, or widow’s benefit. However, if she takes her widow’s benefit before her full retirement age it will be reduced somewhat, depending upon her age when she applies. The following assumes your wife will have reached her full retirement age when you pass.

Normally, the Widow’s Benefit equals the benefit amount that the deceased spouse was receiving, meaning your wife would get the same amount you were receiving when you died – in this case $1838 per month. There is, however, a somewhat obscure exception, which may apply here. The exception I’m speaking of is a Social Security rule, which applies when the deceased spouse, claimed benefits before full retirement age and the surviving spouse is eligible for widow’s benefits. The surviving spouse has the option of either keeping their own benefit or claiming the widow(er)’s benefit, and in this case your wife would obviously claim the widow’s benefit because it’s higher than her own. But (and this is a big but) because you claimed your Social Security benefit early, your widow is entitled to either of the following, whichever is more:

The amount of benefit you (the deceased spouse) were receiving at your death, or, 82.5% of what your benefit would have been had you (the deceased spouse) waited until your full retirement age to start your Social Security benefits.

Using the numbers you gave me as an example, since your current benefit amount is $1838/month, taking out COLA increases granted since you applied means your original early retirement benefit was about $1780. That means that your benefit amount at your full retirement age of 66 (known as your Primary Insurance Amount, or “PIA”) would have been about $2374. Adding past COLA increases onto your PIA brings your PIA amount up to $2458. Using the above 82.5% exception rule, your wife would be entitled to $2027 per month (82.5% of $2458), instead of the $1838 you are now receiving. And that extra $189 per month will, I’m sure, be important to her after you’re gone. Any future COLA increases will add to both the early retirement benefit you receive while living and your full retirement age PIA amount, and your surviving widow will get the higher benefit amount at your passing. Note that your wife should not wait past her full retirement age to apply for survivor’s benefits, as they do not earn delayed retirement credits.

Dear Rusty: I am an older father, having recently been blessed with another child from my second marriage. I started collecting Social Security at my full retirement age and although my current wife is not yet eligible to receive benefits, I now have a young child whose future I need to worry about. So I’m wondering: is there any way Social Security will help pay for my child’s future college education when that time comes?

Dear Older Father: Well, Social Security won’t pay the tuition for your child directly, but since you’re already collecting benefits and have a young child from your second marriage, your dependent child is entitled to up to half the Social Security amount you are collecting. If you haven’t already, you should apply for this benefit right away. Then what you may do for your child is take advantage of what some have called a “Viagra College Fund,” that is, a Qualified Tuition Plan authorized by Section 529 of the Internal Revenue Code. This is often referred to simply as a 529 Plan, and every U.S. state and the District of Columbia, as well as many educational institutions, offers at least one type of 529 plan. You may want to establish a 529 for your dependent child and then deposit their Social Security benefits into that plan. There are two types of 529 plans – prepaid tuition plan and college savings plan. The former allows you to purchase tuition credits at a participating university and the latter simply establishes a savings account to be used for future college expenses. As you might expect, there are plenty of rules governing these plans, and you can find out much of what you need to know at https://www.sec.gov/investor/pubs/intro529.htm. You are to be commended for thinking so far ahead for your young dependent’s future. Your minor child’s Social Security dependent benefit could be as much as 50% of your benefit, and will normally continue until they are 18 years of age (or 19 if still a student or disabled), so a substantial amount of college savings could be accumulated in the 529 by the time he or she attends college.

Dear Rusty: I have delayed taking my Social Security retirement benefits for about 3 years past my full retirement age. I now want to start collecting benefits and am confused about the benefit calculation if I start midyear.

Yesterday, I went to the Social Security office and applied and was told I would receive $1,000 month (to make up a number) starting in November and again in December, and then in January the amount would increase to $1070. Looking at the award letter online today, it is only showing the $1,000 starting in November. A long call to Social Security did not result in the person saying the amount would increase in January so I suspended my claim. Looking further online it appears the $1,000 amount was the benefit as of January 2017, 10 months ago. Searching the Social Security website seems to say the benefits increase on a monthly basis, not annually – but the $1,000 is an annual calculation from 10 months ago. There is no verbiage talking about what happens if a person delays collecting and then sometime before he turns 70 starts to collect.

So the question is: If I do start receiving the January 2017 amount of $1,000 in November, will Social Security do an adjustment for future payments in January of 2018 for the 10 months from January to October? Or am I stuck with the reduced $1,000 forever?

Signed: Uncertain

Dear Uncertain: You haven’t given me your birthdate, but from what information you’ve provided I believe it to be January 1948, which means that your full retirement age (FRA) for Social Security purposes is 66. Since you did not apply for Social Security at your FRA, you have been building Delayed Retirement Credits (DRCs) at a rate of 8% per year, which means that as of January 2017, you were entitled to 124% of the benefit you were due at FRA.

You are correct that DRC’s are earned monthly and the increase rate is 2/3 of 1% per month, so by November of 2017 you would have accrued an additional 6% DRCs for a total of 130% of your Primary Insurance Amount (or “PIA”, the amount you were entitled to at your FRA). However, since Social Security only re-computes benefits to apply DRCs in January of each year, you wouldn’t actually receive a benefit increase for that extra 6% of DRCs until January 2018. In other words, Social Security does not pay DRCs retroactively.

If you are correct that your benefit amount for January 2017 was $1000, by doing the math we calculate your Primary Insurance Amount (the amount of your benefit at age 66) to be about $807 and your benefit amount starting in either January or November of 2017 at about $1000, or 124% of your PIA. Since as of November you have actually accrued 130% in DRCs, you will get the additional 6% DRCs starting with your January 2018 benefit (paid in February 2018) for a total of $1,049 (130%). If you instead wait until you are age 70 to start benefits in January 2018, the amount would be 132% of your PIA, or about $1065 ($807 x 132% = $1065). Our figures do not allow for any COLA increases.

So if you did start your benefits in November 2017 your benefit then would be the same as it would have been in January 2017, because DRCs are only applied to benefits in January of each year. Then in January 2018 your benefit amount would be recomputed to add the additional 6% DRCs you accrued from January – October 2017. The exception to this rule is that earned DRCs are immediately applied to your first benefit payment in any month when you apply for benefits at age 70.

Dear Rusty: I am 60 and currently getting Social Security Disability, but I would like to return to work as much as possible. I am concerned with how my earned income would affect my Social Security at age 65 (or even at age 70). I understand that Social Security has a “trial work” program that allows me to keep receiving disability for a while, to allow me to test my physical limits. I wish to make sure that my Social Security Disability does NOT automatically convert to the standard (early) benefit at age 62 (Ouch!). I read something about a 96 month period that is crucial. So many factors involved, so I wish to make the right decision.

Signed: Wanting to Work While Disabled.

Dear Wanting: Social Security Disability Insurance, or SSDI, provides eligible disabled workers with a financial lifeline in return for the insurance premiums they’ve paid into the program during their working years. Although the criteria are stringent, once awarded the benefit provides income to partially replace earnings that are lost due to a long term disability. Social Security encourages those receiving SSDI benefits to eventually return to the workforce and offers a “Ticket to Work” program to help achieve that goal. This program gives you the chance to test your ability to work for at least nine “trial work months” during a 60 month period, and during this trial work period you’ll receive your full SSDI benefit regardless of how much you earn. Briefly, any month you earn more than $840 (for 2017) counts as a trial work month. After you have reached nine trial work months, you can still receive your SSDI benefits for another 36 months, except that you won’t receive benefits for any month that your earnings exceed what Social Security considers “substantial”, which for 2017 is $1,170 (note that these dollar amounts can change annually). If your benefits stop because your earnings regularly exceed “substantial”, and within 5 years you are again unable to work due to your disability, your disability benefits can be restarted (without having to re-apply). You can get full details about the Ticket to Work program by going to https://www.ssa.gov/pubs/EN-05-10095.pdf, but this program should allow you to work and test your physical limits without a negative impact to your Social Security benefits.

To address a few of your other concerns: Your earnings from attempting to return to work while disabled shouldn’t negatively affect your future Social Security retirement benefit at your full retirement age. Your disability benefits will not automatically convert to early retirement benefits at age 62, but they will automatically convert to retirement benefits when you reach your full retirement age (which is 66 years plus 6 months if you were born in 1957). However when they convert, your benefit amount will remain the same as you were receiving in disability benefits. If you are on Medicare and your benefits stop as a result of exceeding the substantial earnings limit, as long as you are still disabled your free Medicare Part A coverage will continue for at least 93 months after the 9 month trial work period. However, you will still have to pay a Medicare Part B premium in order to receive Part B coverage.