Legal Question in Tax Law in Arizona

Re: SS Benefits

The SS system is not a pool of money you have put in, and what is not used by, in this case, the two of you proceeds to the survivor. The SS system is amazingly like a Ponzi scheme, that if the insurance companies did a similar investment activity would result in criminal penalties.

That being said, the ss is funded by current working individuals, not by your past deposits. When it was determined that your spouse had a benefit, this was based on what you had earned, i.e. the number of work quarters you might have put in to qualify for SS. This qualifying of your wife didn't take away any possible benefit you had yourself.

If this SS program was run like a 401k, then there would be rollover provisions to the survivor. No such luck with the SS system.