When older Americans get set to retire, know that there is invariably that one pressing question that all must answer: when should a person start claiming Social Security benefits?  

For many experts, the most prudent financial decision would be to hold off on filing for the benefits as long as possible—preferably till age seventy.  

According to the Social Security Administration (SSA), “workers planning for their retirement should be aware that retirement benefits depend on age at retirement. If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age sixty-two, but doing so may result in a reduction of as much as 30 percent.”  

The agency concluded that “starting to receive benefits after normal retirement age may result in larger benefits. With delayed retirement credits, a person can receive his or her largest benefit by retiring at age seventy.” 

However, what a person cannot ever control is when one dies, which will naturally have a huge effect on how much Social Security money an individual will collect over his or her lifetime. If this occurs, then it’s the closest survivors who will have some decisions to make.  

Who Reports Death? 

First, know that is important for the SSA to be alerted as soon as possible after a beneficiary dies. But be aware that a person cannot report a death online.  

“In most cases, the funeral home will report the person’s death to us. You should give the funeral home the deceased person’s Social Security number if you want them to make the report,” according to the SSA website, adding that one can call 1-800-772-1213 to report a death.

The agency also noted that the deceased is not due any Social Security benefits for the month that the death occurred. If payment was made, then that money would need to be returned.

However, there is a “one-time lump-sum death payment of $255 (that) can be paid to the surviving spouse if he or she was living with the deceased; or, if living apart, was receiving certain Social Security benefits on the deceased’s record,” the website states.

“If there is no surviving spouse, the payment is made to a child who is eligible for benefits on the deceased’s record in the month of death,” according to the website.

Survivor Benefits 

As for a spouse or qualifying dependent who already was receiving money based on the deceased’s record, the benefit will automatically convert to survivor benefits. Once the widow or widower reaches full retirement age, they are legally entitled to the deceased spouse’s full benefit.

But if the widow or widower qualifies for Social Security on their own record and the monthly payments are higher, they have the option to switch to their own benefit at any time between ages sixty-two and seventy.

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.  

Image: Reuters