When a loved one dies, the financial fallout to deal with often adds to your grief. In certain circumstances, social security survivor benefits can fill some of this void. As of June 2020, social security paid approximately 6 million people monthly survivor benefits.
However, navigating the social security benefits maze can be confusing, especially when faced with a loss. In this article, we cover how survivor benefits work, who qualifies, and other frequently asked questions.
How do social security survivors work?
The first thing you need to know is how social security is funded in general: you pay into social security through wage taxes. If you’re a traditional employee, pay 6.2% on the first $ 142,800 of your income for Social Security in 2021 plus 1.45% for Medicareor a total of 7.65%. Your employer then corresponds to this 7.65%.
In 2021, you’ll receive Social Security credit for every $ 1,470 you earn. However, you cannot earn more than four credits per year. As soon as you have 40 credits, which corresponds to 10 years of full-time work, you are considered fully insured. The requirement is lower for younger employees. If you are fully insured, you are entitled to retirement benefits. It also means that certain family members may be eligible for survivor benefits based on your file when you die.
Before we go any further, there are two key terms that apply to both retirement and survivor benefits.
- Full retirement age (FRA): The age at which you qualify for your primary insurance. If you were born before 1954, your full retirement age is 66. For people born between 1954 and 1960, it is between 66 and 67 years of age. For people born in 1960 or later, it’s 67 years.
- Primary insurance amount (PIA): The amount of your retirement pension at full retirement age. You can take a reduced amount from the age of 62. You can also hold out until the age of 70 for even greater benefit than you did at 66 or 67. The more you have earned over the course of your life, the higher your elementary education insurance amount will be.
If you die before receiving social security benefits, your survivors’ benefits will be based on your primary insurance benefit. Let’s look at a few different scenarios. In all cases, we assume that your full retirement age is 67 and your primary insurance is $ 3,000 per month.
If you died at 40: Your survivors’ benefits are based on the primary insurance amount of $ 3,000. That doesn’t necessarily mean they’ll get $ 3,000 a month. But that’s the number you would start with. Your benefit would be a percentage of that $ 3,000. We’ll discuss what that percentage would be in the next section.
If you died at the age of 65: The benefits of your surviving dependents depend on whether you have already received your own old-age pension.
For example, let’s say you started the perks as soon as you blow out the candles on your 62nd birthday cake. You only receive two thirds of your primary insurance. If your primary insurance is $ 3,000 a month, you’ve been getting $ 2,000 since you started early. Survivor benefits are calculated as a percentage of $ 2,000, not $ 3,000.
But if you have not yet used any services? Your primary insurance amount of $ 3,000 is used in the calculation.
If you died at 90: The benefits of your surviving dependents depend on when you received your old-age pension. If you started at 62, the benefits are still based on $ 2,000. If you started at your full retirement age of 67, these will be based on $ 3,000.
However, if you had waited until 70 for the maximum benefit, you would have increased your monthly checks by 24%. That would get you to $ 3,720 a month. Your patience would pay off for your survivors as its utility is also based on $ 3,720 per month.
10 FAQs on Social Security Survivor Benefits
Here are 10 frequently asked questions about Social Security Survivor Benefits. Note that this FAQ is not intended to provide personal advice. If you have any questions about your particular situation, give us a call Your local social security office is a must.
1. Who counts as a survivor?
The most common reason why you are entitled to benefits is the death of your spouse or ex-spouse. However, certain other family members may also be eligible.
Widows and widowers
If you are a surviving spouse and have been married for at least nine months, you can get:
- 100% of your spouse’s benefit if you wait until your full retirement age.
- Between 71.5% and 99% of your deceased spouse’s benefit when making an early claim. You can start at the age of 60 or, if you are disabled, with a benefit of 50 years.
- 75% of your deceased spouse’s benefit, regardless of your age, if you are caring for their child who is 16 years of age or younger or who is disabled.
You can claim one Former spouse’s social security whether they are alive or dead, if the marriage was at least 10 years and you have been divorced for at least two years. The benefits are usually calculated the same for spouses and ex-spouses. You can get:
- 100% of your ex-spouse’s benefit if you wait until your full retirement age.
- Between 71.5% and 99% of your ex-spouse’s benefit if you make a claim early. You can start at the age of 60 or, if you are disabled, with a benefit of 50 years.
- 75% of your ex-spouse’s benefit, regardless of your age, when you take care of their child who is 16 years of age or younger or is disabled.
The rules for current and former spouses are pretty similar: both can claim up to 50% of a living worker’s full retirement pension.
However, the rules change when the employee dies: both current and former spouses are entitled to up to 100% of that person’s benefits.
If you’ve been married to someone who has been married multiple times, you don’t need to worry about who the other spouses are claiming to. Nobody’s choice will affect the benefits of others.
As a rule, children can receive 75% of the benefits of their deceased parents under the following conditions:
- The child is under 18 or 19 years old if they are still a full-time student
- The child is at least 22 years old and disabled and the disability started before the age of 18.
- You are unmarried.
However, social security has maximum family benefit. It is usually between 150% and 180% of the primary insurance for the deceased employee. So if you are a surviving spouse who is 75% eligible because you are caring for two children who are also 75% eligible, you will not receive 225% of your deceased spouse’s benefit. The formula for Calculation of the maximum family benefit is complex. Contact your local social security office if you have any questions.
Note that if the person has an ex-spouse, any benefit they receive will NOT count towards your maximum family benefit.
If you are the deceased’s parent, you can qualify if:
- Your adult child provided at least half of your financial support.
- And you are 62 or older.
A dependent parent is usually entitled to 75% of the benefit of their deceased child, provided that this amount is higher than the benefit they would receive themselves.
2. Can I receive spouse’s survivor benefits if I remarry?
You can remarry at the age of 60 (or 50 if you are disabled) and still be entitled to benefits from a deceased spouse. This also applies if you and your deceased spouse were divorced. However, if you remarry before then, you will not be entitled to their benefits.
If you receive benefits for looking after a child, your benefit will end when you remarry. All benefits your child has received remain in effect for as long as they are entitled to.
Note that the rule is different if you are using benefits on the record of a living ex-spouse. If you are married to someone else, you will not be able to get any benefits from your ex-spouse regardless of your age.
3. Can I collect my own benefits and those of my deceased spouse?
No. You can collect a maximum of 100% of the larger benefit. If you receive $ 2,000 a month in spouse survivor benefits but you claim you qualify for $ 2,500, you will receive your own $ 2,500 retirement pension. You will not receive any survivor benefits.
4. Will I get a bigger benefit if I wait until the age of 70?
No. It’s a great way to wait past full retirement age until you are 70 Maximize your social security if you make claims based on your own income. Earn 8% late retirement credit for every year that you wait past full retirement age. The maximum benefit is 70. However, this only works if you receive benefits based on your own income balance.
If you state on a deceased spouse’s file whether you were married or divorced at the time of their death, your benefit will be a maximum at your full retirement age of 66 or 67. The same rule applies if you are receiving benefits based on the spouse’s or ex-spouse’s records.
5. Can I claim survivors’ benefits and later switch to my own larger benefit?
Yes. You could claim survivor benefits and later switch to your own old-age pension if it is larger. Or you could do the opposite and use your own benefits and switch to survivor benefits if that increases your payments.
This is a common source of confusion as the Bipartisan Budget Reconciliation Act of 2015 changed the rules for retirement benefits, but not for survivor benefits.
In the past, couples have often coordinated services. The higher earner would hold out to 70 to get benefits. The low earner would choose the benefits at its own discretion and then switch to claim 50% of his spouse’s higher benefit once the lower earner reached full retirement age. The law removed this option for people born after January 2, 1954. However, this also does not apply to survivors’ benefits.
Here’s an example of how it works for survivor benefits: Anna is eligible for a maximum survivor benefit of $ 2,000 per month based on her late husband Bob’s records. However, if she waits until she is 70, she can receive a $ 3,000 monthly retirement pension based on her own income.
Anna could start taking advantage of Bob’s benefit from the age of 60. She would get 71.5% of his $ 2,000 as she immediately claimed a monthly benefit of $ 1,430. Or she could wait until her full retirement age and get the full $ 2,000 a month. Once Anna is 70, she can switch and collect her maximum benefit of $ 3,000.
But what if Bob is still alive? Anna cannot apply for spouse benefits and then switch to retirement benefits.
6. Can I work and collect survivor benefits?
Yes, but if you have not yet reached full retirement age, social security will reduce your benefit in 2021 by the following amounts:
- $ 1 for every $ 2 you earn over $ 18,960.
- $ 1 for every $ 3 of $ 50,520 earned in the year you reach full retirement age.
- Once you reach full retirement age, your income will no longer affect your benefits.
These rules apply regardless of whether you are drawing old-age or survivor’s benefits early.
However, if you are caring for the deceased’s child, the child’s benefits will not be affected by your income. Even if you have earned $ 100,000, you will receive 75% of the benefit for the child. However, you wouldn’t get 75% for yourself as your earnings would run out of your benefits.
7. Will I be disabled if my spouse had SSDI at the time of death?
You can only get Social Security Disability Insurance (SSDI) based on your own disability. However, if your spouse was fully insured – remember that this usually means 10 years of full-time work – you may be entitled to survivor benefits.
8. How do you apply for survivor benefits?
Unlike regular social security benefits, you cannot apply for survivor benefits online. You cannot report a person’s death to Social Security online either. Often times, if you give the funeral home the person’s Social Security number, they’ll report back.
If you need to report a death or claim benefits, you can call Social Security at 800-772-1213 (TTY 800-325-0778) between 8:00 p.m. and 7:00 p.m. Monday to Friday. You can also visit your local office.
Check the Social security benefits for survivors Page with a list of the documents that you need to apply for. If you miss a document, contact Social Security anyway. Employees can often get the information they need from your state’s Bureau of Vital Statistics.
Survivor Benefit Recap: The big takeaways
We get it: that was a lot of information. Here are the top takeaways to remember:
- Survivor benefits are based on the amount of primary insurance for the deceased employee and on whether or not he has made use of benefits.
- If the surviving spouse (or ex-spouse) receives benefits related to their own age, they will receive 71.5% of the deceased spouse’s benefit if they start at 60 (or 50 if disabled). If they hold out until full retirement age, they’ll get 100%. However, delaying past full retirement age does not result in more money.
- The maximum benefit for spouses and ex-spouses is 100% of the benefit, whichever is greater: the survivor benefits of the deceased spouse or the old-age pension of the living spouse.
- Unmarried children can typically receive 75% of their deceased parent’s benefits if they are under 18 (or 19 if still in high school) or if they are disabled.
- If a surviving spouse is caring for the deceased’s child who is under the age of 16 or is permanently disabled, they can receive 75% of the benefit regardless of their age.
One final, final thought: survivor benefits can be a lifeline when someone dies. However, social security alone – regardless of whether you are receiving old-age or survivor benefits – is usually not enough to pay all of your retirement costs. If you are still working it is important except for retirement.
Don’t get discouraged if you are behind on saving. Anything you can set aside to supplement your social security will make your retirement years that much more comfortable.
Robin Hartill is a certified financial planner and senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advisory column. Send your tricky money questions to [email protected]
This article originally appeared on www.thepennyhoarder.com