SALT LAKE CITY — Many people eagerly anticipate the day they can retire and begin collecting Social Security benefits. In contrast, most people never think about the day those benefits end.

Retired married couples usually receive a Social Security benefit for each person. After reaching full retirement age, each has the option to receive an individual benefit based on his or her personal work record; or, a spouse who did not qualify for Social Security on a personal work record can receive a spousal benefit.

When one of the two dies, one of those Social Security benefits disappears and there is a corresponding decrease in the combined household benefit amount they received as a couple. In other words, the widowed spouse finds her or himself facing a significant decline in household income.

The surviving spouse usually has the option to continue the larger of the two benefits. According to information from the National Caregivers Library, "A surviving spouse may be able to choose to receive spouse benefits or to receive benefits based on his or her own work record, and should look into both to decide which will provide the highest level of benefits."

A study by the Social Security Administration found that for women, the loss of income after the death of a spouse (including the loss of Social Security benefits) was "an important risk factor for transition into poverty."

The amount of the household benefit reduction can vary because the calculations for Social Security benefits are complex. The decline will be at least 33 percent and could be as much as 50 percent.

To understand how the income reduction occurs, consider two hypothetical examples:

Case 1 — Loss of a spousal benefit

Ed started collecting Social Security benefits when he reached full retirement age. Ed's monthly benefit amount is $2,000. Ed's wife, Mary, never had outside employment. When she reached full retirement age, Mary began collecting a spousal benefit of $1,000 a month. That gave the couple a combined household Social Security benefit amount of $3,000 monthly.

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Many people are unaware that they may be eligible for spousal benefits through Social Security. Essentially, a spousal benefit means someone can receive a monthly Social Security payment based on the work record of a qualifying spouse.

Sadly, Ed died unexpectedly at age 73. As a result, Mary switched to a survivor benefit that equaled 100 percent of Ed's Social Security benefit. The monthly spousal benefit Mary received goes away. Instead of the $3,000 total monthly combined benefit, Mary now receives $2,000 per month.

Case 2 — Loss of an individual benefit

Like the prior couple, Stan and Jackie each began collecting Social Security benefits at full retirement age. In this case, however, Stan and Jackie each worked full-time during their pre-retirement years. Stan's monthly Social Security benefit is $2,400. Jackie's monthly Social Security benefit is also $2,400. So their combined household benefit amount is $4,800.

Jackie is 78 and Stan is 77 when Jackie dies from cancer. Stan continues to receive his full monthly retirement benefit, but Jackie's benefit ends at her death. So the total monthly household benefit available to Stan drops 50 percent — from $4,800 to $2,400.

These examples are straightforward. Unfortunately, real-life situations are often more complicated. According to the book "Social Security Strategies" by William Reichenstein and William Meyer, when death occurs before age 70, there are additional considerations.

"One key is that the surviving widow's benefits based on her earnings record continue to receive delayed retirement credits until they are begun." In such cases, the widowed spouse might opt to start taking survivor benefits prior to age 70 while allowing his or her own benefit to accumulate until after age 70, at which point it could be larger than the survivor benefit.

Regardless of what the surviving spouse chooses, however, the fact remains that the combined household benefit will be reduced once one partner passes away.

Unfortunately, as couples plan for their retirement, many overlook the decline in total household Social Security benefits that inevitably results when either partner dies. Without proper planning, that loss of income can result in forced changes like the sale of a home, liquidation of heirlooms and personal possessions, inability to pay for needed health care expenses, reduction in one's standard of living and more.

Couples who are approaching retirement might want to discuss this situation with a qualified retirement consultant so that one of them is not one day dealing with a financial calamity at the same time he or she is trying to cope with the death of a lifelong partner.

Flint Stephens has a master's degree in communications from Brigham Young University. He is a licensed investment adviser.

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