New Bill Would Boost Social Security Survivors Benefit by Up to 25% — What Would Change?

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A new Congressional bill introduced by Rep Linda Sanchez (D-Calif.) aims to increase Social Security benefits for surviving spouses, who are often hit with a sudden loss of income when a spouse dies.

Sanchez, a ranking member of the Ways and Means Social Security Subcommittee, introduced the Protecting Our Widows and Widowers in Retirement (POWR) Act on June 7, along with six co-sponsors.

One of the bill’s main goals is to close the Social Security benefits gap for women survivors, who “continue to rely more heavily Social Security than men,” Sanchez said in a press release. She cited data showing that the average widow sees a 33% to 50% reduction in Social Security benefits after the death of her spouse.

That can create enormous financial difficulties, mainly because the typical senior needs 79% of the income received while both spouses were alive to maintain their standard of living, Sanchez said. The POWR Act would create an alternative benefit equal to 75% of the combined income received while both spouses were alive. Given that some survivors see as much as a 50% drop, the bill could boost benefits by as much as 25%.

“Losing a spouse is devastating, and for those who depend on Social Security, the added financial distress of losing significant income can make an already difficult time even more troubling,” Sanchez said in a statement. “The POWR Act will create an alternative benefit, ensuring widows and widowers can keep paying their bills. I am proud to reintroduce this legislation to give some security and peace of mind to those who have lost a loved one.”

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Under current law, surviving spouses can receive either a survivor’s benefit — which is up to 100% of their spouse’s Social Security primary insurance amount — or their own Social Security benefit, Think Advisor reported. But they can’t get both at the same time.

“Among Social Security’s most important protections are the monthly survivor annuities, currently paid to over four million widows and widowers,” Nancy Altman, president of Social Security Works, told ThinkAdvisor in an email. “But these benefits are very modest and often represent a drastic drop in family income. Women and men who have just lost their spouses should not also face a substantial loss of income that puts them at risk of poverty.”

The POWR Act, she added, “takes the important step of increasing survivors’ benefits so that widows and widowers can live with dignity.”

A survivors benefit can be paid to a surviving spouse as early as age 60, but the benefit paid at age 60 is only 71.5% of the benefit that would be paid when the survivor reaches full retirement age, the Fremont Tribune reported. The benefit at full retirement age is 100% of the worker’s full benefit amount.

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