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How Long Will You Collect Social Security Survivor Benefits?

A common question about the Open Social Security calculator is why it uses mortality tables (to calculate a probability of being alive in each given year) rather than simply assuming the user will die precisely at their life expectancy.

Another common question is why, relative to other calculators, this calculator is more likely to recommend an early filing age for the lower earner in a married couple.

Both questions have the same answer, and it has to do with survivor benefits.

Specifically, as we will discuss more thoroughly below, assuming that each person will die precisely at their expected date generally results in:

  1. An underestimation of the value derived from the higher earner delaying benefits, and
  2. An overestimation of the value derived from the lower earner delaying benefits.

Let’s look at an example.

Consider a husband and wife, each born 4/15/1960. The husband has a PIA of $1,800, and the wife has a PIA of $1,000. And let’s assume that they are in average health.

Let’s imagine a simple filing strategy in which the wife files at her full retirement age (67), and the husband files at age 70.

Looking at Individual Life Expectancies

Let’s model what happens with that filing strategy, if we were to use fixed “death date” assumptions (as other calculators do).

If we look at the SSA 2015 period life table to find their life expectancies at age 62, we see that:

  • The husband has a life expectancy of age 82, and
  • The wife has a life expectancy of age 84.81.

Given these life expectancies and a fixed “death date” assumption:

  • The wife will collect her own benefit starting at age 67,
  • The husband will collect his own benefit starting at age 70,
  • The wife will begin collecting survivor benefits when the husband dies at age 82, and
  • She will collect that survivor benefit until she dies at age 84.81 (i.e., 84 and 10 months).

Given this outcome, how beneficial was it for the wife (lower earner) to wait, and how beneficial was it for the husband (higher earner) to wait?

The wife waiting until her FRA had the effect of increasing her total monthly benefit from age 67 to age 82 (at which point the survivor benefit kicked in). That’s 15 years of increased benefits.

And the husband waiting until age 70 had the effect of increasing the total household monthly benefit from age 70 until the wife dies at age 84 and 10 months. That’s 14 years and 10 months of increased benefits.

Now let’s look at what happens when we use a more realistic model, which accounts for the fact that people usually do not die exactly at their life expectancy.

Using a More Realistic Model

When we use year-by-year mortality calculations (i.e., calculating the probability that each person is alive, each year), we get a different result.

Specifically, using the same mortality table as above (i.e., the SSA 2015 period life table) — but now accounting for the fact that people can, and usually do, die earlier or later than their life expectancy — we find that:

  • By age 78 (and 0 months), there’s already a 50% chance that at least one of the spouses has died, and
  • The probability that both spouses have died doesn’t reach 50% until age 88 and 10 months.

So with this more realistic model, how beneficial was it for the wife (lower earner) to wait, and how beneficial was it for the husband (higher earner) to wait?

The wife waiting until her FRA had the effect of, on average, increasing the total household monthly benefit from her age 67 until age 78 (after which point it’s more likely than not that either she has died or the husband has died and therefore she has begun collecting a survivor benefit). That’s 11 years.

The husband waiting until age 70 had the effect of, on average, increasing the total household monthly benefit from age 70 until age 88 and 10 months (after which point it becomes more likely than not that both spouses have died). That’s 18 years and 10 months.

Comparing the Two Approaches

So to summarize, when we used less realistic “fixed death date” assumptions:

  • The value derived from the lower earner delaying was overstated by 36% (15 years of increased benefit, rather than the more likely 11 years).
  • The value derived from the higher earner delaying was understated by 21% (14 years and 10 months of increased benefit, rather than the more likely 18 years and 10 months).

And to be clear, this overall concept still holds true if we vary the ages of the spouses (i.e., if one is older or younger than the other). And it still holds true if we use a different mortality table for one or both spouses (i.e., if one or both people are in better or worse than average health).

That’s because:

  • When the lower earning spouse delays benefits, it increases the amount the couple receives per month as long as both people are still alive (so we’re concerned with a first-to-die joint life expectancy), and
  • When the higher earning spouse delays benefits, it increases the amount the couple receives per month as long as either person is still alive (so we’re concerned with a second-to-die joint life expectancy).

And it’s always true that:

  1. The first-to-die joint life expectancy of a couple is shorter than the shorter of the two individual life expectancies, and
  2. The second-to-die joint life expectancy of a couple is longer than the longer of the two individual life expectancies.

In other words, when you assume that each person dies precisely at their life expectancy, the result is that you are:

  • Using the shorter of the two individual life expectancies as a stand-in for the couple’s first-to-die joint life expectancy (thereby overstating the value of having the lower earner delay), and
  • Using the longer of the two individual life expectancies as a stand-in for the couple’s second-to-die joint life expectancy (thereby understating the value of having the higher earner delay).

If you use Open Social Security as well as other Social Security calculators, you will find that Open Social Security often recommends an earlier filing age for the lower earning spouse than what other calculators recommend. This is because other calculators are using “fixed death date” assumptions, and thereby generally overestimating the value of having this person delay benefits.

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