Q: I am a widow, age 58, unmarried. If I apply for widow’s benefits at age 60, what percentage of my deceased husband’s Social Security benefit will I be entitled to? A Social Security representative said I would only be entitled to 50 percent of his benefits.

I am still working. Will my benefits be impacted by my income? How will applying for widow’s benefits affect my benefits when I apply for benefits based on my work record?

A: At age 60, you will be entitled to 71.5 percent of his benefits. If you wait until your full retirement age (67), you would be entitled to 100 percent of his benefit. Between ages 60 and 67, the benefit would be prorated.

If your earnings exceed specified yearly income (the amount is $17,640 in 2019, and is updated each year), your survivor benefits are reduced $1 for each $2 above the limit until your full retirement age. In the year you reach your full retirement age, for every $3 you earn over $46,920, $1 will be withheld from your benefit. After you reach full retirement, there is no penalty.

Even if your income does exceed these limits, and your Social Security benefits are reduced as a result, after you reach full retirement age your benefits will be increased to make up for the prior penalties.

Regarding your benefits based on your work record, applying for a survivors benefit only will not impact your benefit based on your work record. The two are independent. If a Social Security representative tells you otherwise, they are wrong; ask for a supervisor. Survivor benefits are available only if you remain unmarried or wait to remarry until after age 60.

Q: I will reach age 70½ this year. I am retired. I have both a 401(k) and a traditional IRA. I am confused as to when I must take my first two required minimum distributions, and which balances are used for the computation.

A: Since you have two different types of retirement plans, you must make separate required minimum distributions (RMDs.) If you have separate IRAs with different custodians, you can combine the balances of the separate IRAs and make one RMD from one of the IRAs to satisfy IRS requirements. However, you must make a separate RMD for your 401(k).

If you have the option to roll over your 401(k) to an IRA, then you would be able to make one RMD. However, you should do that only if you believe the IRA alternative has more benefits than your current 401(k).

The first RMD must be taken by April 1 of the year following the year you turn 70½. So, in your case, you must take your RMD by April 1, 2020. That distribution should be based on your year-end balance at the end of 2018. The custodians of your 401(k) and IRA should be able to tell you the amount of your RMD.

Although you can wait until April 1, 2020, you have the option of taking your first distribution by the end of 2019. Regardless of when you take your first distribution, your second distribution must be taken by the end of 2020. That distribution should be based on your year-end balances in your 401(k) and IRA at the end of 2019.

In other words, if you do postpone taking your first distribution until 2020, you will have to take two distributions in 2020. Your decision as to whether to take two distributions in 2020 should be based on your expected total income in 2020 as compared to 2019. Taking two distributions in 2020 may push you into a higher marginal tax bracket for that year. In subsequent years, you will have one RMD required by the end of each year for each type of retirement account.

IRS Publication 59-B covers RMD issues, and contains the instructions and tables required to compute the required RMD based on your age.

Elliot Raphaelson welcomes your questions and comments at raphelliotgmail.com.

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