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.