Dear Carrie: My husband and I are each getting Social Security based on our own work records. When one of us dies, will the survivor collect both benefits, or do we need to plan for substantially reduced income? — A Reader

Dear Reader: There's a misconception about survivor benefits that when both spouses are collecting Social Security and one dies, the surviving spouse gets both benefits. Unfortunately, that's just not so. While on the surface that might make sense, Uncle Sam isn't that generous.

The rules can be somewhat complex depending on your age and marital status, but in your case, it's pretty straightforward. Because you and your husband are both currently collecting benefits, if one of you passes away, the survivor will be eligible to collect the higher of the two benefits. In other words, you can either continue to collect your own benefit or switch to a survivor benefit if that would be greater. There's no double-dipping.

Here's how it works:

If the Surviving Spouse's Benefit Is Higher

Let's say your Social Security benefit is higher than your husband's and he passes away before you do. As the surviving spouse, you may be eligible for a $255 lump sum death benefit — for which you'd need to apply — but nothing more. Because your monthly Social Security payment is higher than your husband's, you would simply continue to receive your own benefit.

If the Deceased Spouse's Benefit Is Higher

Now let's reverse that scenario and say your husband's benefit is higher than your own. In this case, if he passes away before you, you'll be eligible to collect 100% of his higher benefit. A surviving spouse can collect survivor benefits as early as age 60 (earlier if disabled or caring for dependent children), but the benefit would be incrementally reduced each month before the survivor's full retirement age (FRA).

Because you're already collecting Social Security on your own work record, you would need to apply for the survivor benefit. The Social Security Administration would then verify that the survivor benefit would be higher than your own and adjust your benefit accordingly.

For Couples Not Yet Getting Benefits

As I said, for couples already getting benefits, the options are pretty limited. But for couples still trying to figure out how to maximize benefits, there are a few strategies to consider.

One possibility is for the lower-earning spouse to apply for benefits early, at FRA, while the higher-earning spouse delays until age 70. That would potentially increase the survivor's benefits, as well as benefits during the couple's lifetime. Another option for people born before 1954 is to have one spouse file for benefits at FRA while the other spouse files for only a "restricted" spousal benefit, letting their own benefit accrue until age 70.

And for couples who anticipate a long life and can afford it, if each spouse can wait until age 70 to file for benefits, so much the better. Again, the goal is to maximize both lifetime and survivor benefits.

After One Spouse Is Deceased

The information above is pertinent for couples looking to the future. Once one spouse dies, however, the survivor still has options.

The surviving spouse could, for example, claim a (reduced) survivor benefit from age 60 to 70 and then switch over to the benefit based on their own work record, if that was higher. Alternatively, if a survivor's own benefit based on their work record was lower, they could claim it as early as age 62 and at FRA switch to 100% of their deceased spouse's benefit.

How to Apply for Survivor Benefits

The Social Security Administration should be notified as soon as possible after a person dies. A funeral home will report the death to the SSA if you provide the deceased's Social Security number. Otherwise, you will need to call the SSA at 800-772-1213 or contact your local Social Security office to report the death and apply for the survivor benefit. You can't do this online.

At the time of application, you may be asked to present certain documents such as a death certificate, marriage license, birth certificate or proof of citizenship. You'll also need to answer certain questions. You can find greater details on the process, including a list of documents and questions, on the SSA website.

Whatever Your Situation, Think Ahead

No one likes to think about the loss of a loved one, but whatever your situation, it makes sense to plan ahead and carefully weigh your options. If you know in advance what you may have to deal with, it will be that much easier to handle the details when the time comes.

Understanding Social Security survivor benefits should be just one part of your overall financial and estate planning. Consider talking about it with your financial adviser or attorney. And make sure your family also has access to any pertinent information. In the meantime, enjoy every moment.

Carrie Schwab-Pomerantz, Certified Financial Planner, is president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances After Fifty." Read more at http://schwab.com/book. You can email Carrie at askcarrie@schwab.com. The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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