Maximizing Social Security Survivor’s Benefits
April 25, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier.
Your family may be entitled to receive survivor’s benefits based on your work record
When you die, certain members of your family may be eligible to receive survivor’s benefits (based on your earnings record) if you worked, paid Social Security taxes, and earned enough work credits. The number of credits you need depends on your age when you die, however, no one needs more than 40 credits (10 years of work) to be “fully insured” for benefits.
Survivor’s benefits may be paid to:
- Your spouse age 60 or older (50 or older if disabled)
- Your spouse at any age, if caring for your child who is under age 16 or disabled
- Your ex-spouse age 60 or over (50 or older if disabled) who was married to you for at least 10 years
- Your ex-spouse at any age, if caring for your child who is under age 16 or disabled
- Your unmarried children under 18
- Your unmarried children under 19, if attending school full time (up to grade 12)
- Your dependent parents age 62 or older
This is a general overview–the rules are more complex. For more information on eligibility requirements, go to www.ssa.gov.
How much will your survivors receive?
An eligible family member will receive a monthly survivor’s benefit based on your average lifetime earnings. The higher your earnings, the higher the benefit. This monthly benefit is equal to a percentage of your basic Social Security benefit. The percentage depends on your survivor’s age and relationship to you.
If your family member is already entitled to social security benefits based on his or her own record, he or she will be able to receive whichever benefit is higher – survivor benefits based on your record or benefits based on the family member’s own record.
For example, at full retirement age or older, your spouse may receive a survivor’s benefit equal to 100 percent of your basic Social Security benefit. If your spouse was already receiving social security based on his or her own record when you died and his or her monthly benefit was lower than yours, your spouse would be able to switch to your benefit.
If you delay filing for social security benefits past full retirement age, your spouse’s survivor benefit would also be higher because of your delayed retirement credits. Any delay up until age 70 increases the base for future social security cost-of-living adjustments. This has a powerful multiplier effect on both the standard of living during your lifetime and for your surviving spouse’s lifetime.
You can get an estimate of how much your survivors might be eligible to receive by filling out a request form at your local Social Security office, visiting www.ssa.gov, or reviewing you Social Security Statement.
Before filing for Social Security, consider the many different filing options available to you and ensure that you select the one that provides the best combination of current income, longevity protection, and survivor security for your situation. Keener Financial Planning provides analysis of different filing scenarios and recommendations on which one is most beneficial for you in the context of your overall retirement plan.
April Personal Finance Newsletter
April 15, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The April 2011 Personal Finance Newsletter is now available. This month’s newsletter includes a reminder on Monday’s 2010 IRA contribution deadline and information on social security statements being suspended. We also have articles on the estate tax exemption portability and the opportunity for some to do Roth conversions inside their 401(k) plans. Plus — it’s my pleasure to introduce Keener Financial Planning’s new Planning Assistant, Megan Horst. To read the newsletter, please click here.
Advice quoted in Money Magazine
April 11, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
Money Magazine recently featured my advice to a reader who’s company had stopped matching their 401(k) contributions. The reader was wondering if they should start contributing to a Roth IRA instead of the company plan. See my comments at Money Magazine’s website.
Your Retirement Savings Game Plan
April 6, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
I will be offering a free Keller retirement planning workshop at the public library on Tuesday, April 19.
There are many uncertainties in saving for retirement right now. Even if you never plan to retire, planning for that day when work becomes optional still carries a lot of unknowns. In this workshop, we will cover how you can take control of your retirement plans by focusing on your personal savings, investing, and tax efficiency. This workshop is designed for those more than 5 years away from retirement. We will cover how to:
- determine retirement income needs
- assess the gap between guaranteed sources of retirement income and your spending needs
- prioritize retirement savings and investing strategies to fill the gap
- review which savings methods are most tax-efficient for your situation
- calculate if you’re on track for your retirement goals
- create a plan flexible enough to accommodate future uncertainty
The workshop is free, but RSVP is encouraged for planning purposes to library@cityofkeller.com. A drawing for a free copy of The Investment Answer by Daniel C. Goldie and Gordon S. Murray will also be held.