Social Security based on survivor benefits

Not exactly a tax question but I know there are some smart people on here...

I'm asking for a friend....

She was born in 1959. She was married for 10+ years, never remarried, divorced, and he died after the divorce. I believe her full retirement age is 66 and 10 months, but if I have read this correctly the full age for survivor benefits is 66 and 6 months. She is 64 now. He was 11 years older than her, and waited until his full retirement age before taking his benefits.

Are we correct that she can start taking survivor benefits based on his work record now, although it will be reduced from his full amount because she is not yet full retirement age for survivor benefits? I saw a table which said that someone born in 1959, who took it at 62, would get the spouse's benefits but only get $803 per $1,000.  Presumably, because she is 64 and not 62, this would be slightly higher.

Her plan is to do this, and defer taking her own benefits until she is 70. Does this make sense?

If she continues to work while taking survivor benefits is she penalised? I understand she will be taxed but will she incur any penalties?

Thanks in advance,

R

Yes I am pretty sure she is entitled to survivor benefits from a divorced spouse.

Not sure how working while receiving SS benefits will affect things but maybe you can find out more here

https://www.ssa.gov/benefits/retirement/planner/whileworking.html#:~:text=You%20can%20work%20while%20you,reported%20for%20the%20previous%20year.

You can work while you receive Social Security retirement or survivors benefits. When you do, it could mean a higher benefit for you and your family. Each year, we review the records of all Social Security beneficiaries who have wages reported for the previous year.

I’ve looked into this a bit as I have cancer.  I’ll leave behind my husband and two young kids (possibly, hopefully not!  Yeah for science!)

My husband and kids will get survivor benefits.  My husband will still be working, as we are early 40’s. 

My assumption would be that so long as she qualifies for survivor benefits (I didn’t realise they could be claimed after divorce), it won’t matter that she’s still working.  But worth contacting the embassy’s social security department as they will be able to provide clear answers.

Good suggestion about contacting the FBU in London, this is where myself and my wife applied for Medicare and then SS (my wife).  I'll be applying through them in a couple of years to start my SS. It takes a while (weeks) to get a response but we found them to be very good and the SS application was backdated to the time of the contact email, just complete the form to ask your questions

https://uk.usembassy.gov/u-s-citizen-services/federal-benefits/contacting-the-london-federal-benefits-unit/

KFDancer - so sorry to hear about your diagnosis - the best of luck.

I think the pertinent part from DurhamLad's link  is this:

<<If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2023, that limit is $21,240.>>

But it's not as bad as it sounds as everything that is deducted is returned to you at full retirement age. There would be some complicated math to do as it's not returned in one lump sum - pro rated presumably - and it is returned to the pension she was taking. So would be her ex spouse's until 70. This idea of claiming on your spouse's while allowing yours to continue to grow (8% per yer) until 70 - was phased out except for survivor benefits. It seems like she is golden.

Another question is the amount she will get - will it be based on what he was getting when he passed in 2017, or would she get Cola increases since then? Details...

https://www.ssa.gov/benefits/survivors/

Survivor benefits are payable to an ex-spouse, unless they remarry, I believe. There are numerous links at the bottom of this page, and one of them regards payments while overseas. Perhaps some of this might be useful.

Not sure under these circumstances, but the foreign work test may apply, (limited to 40 hours per month).