Social Security Part 3: Benefits for Family Members and Survivors

Social Security Part 3: Benefits for Family Members and Survivors

Our last post discussed the Social Security benefits available to spouses. Today’s post will focus on what happens when an individual receiving Social Security passes away, and the benefits surviving spouses and other family members may receive. There’s a lot to unpack on this topic so let’s get started.

There are two primary benefits that a surviving spouse may receive from Social Security. The first is a one-time death payment of $255. This benefit is paid directly to either the surviving spouse, or a child if certain requirements are met. You must apply for this benefit within two years of the death of your spouse.

The second, more meaningful benefit is the true survivor’s benefit. This is a continuation of the payments your deceased spouse was receiving, or would have received if they died prior to starting Social Security.

Just like everything with Social Security, there are key points that factor into the amount you will receive on an ongoing basis. To receive the full survivor benefit, you must wait until you reach Full Retirement Age (FRA), but these benefits may begin as early as age 60. Much like retirement benefits, filing early will result in a permanent reduction to the amount you receive.

However, if you qualify for retirement benefits on your own working record and are eligible for a survivor’s benefit, you may elect to receive the survivor benefits early, at a reduced amount without reducing your own retirement benefits. Social Security views these benefits separately and the timing of one benefit may not affect the other.

For example, let’s say you are 60 years old and eligible to receive $2,000/month based on your own working record when you reach FRA. Your spouse passes away and was also eligible for a $2,000/month retirement benefit. You could start the survivor’s benefit now at age 60. You would receive approximately $1,430/month (about 71.5% of the FRA amount). You could receive this benefit for 6 years then switch to your higher benefit of $2,000/month at Full Retirement Age. You could even wait until age 70 to get the maximum benefit, all the while receiving the reduced survivor’s benefit.

You could do the opposite if the survivor benefit is greater that your own. At age 62, you could begin receiving your own retirement benefit at age 62 for a reduced amount. Once you reach Full Retirement Age, you then switch to your survivor benefit to receive the full amount.

If you are divorced and your ex-spouse has passed away, you may be eligible to receive a survivor’s benefits as well. You must have been married for at least 10 years, you must remain unmarried, and must be at least 62 years old. Also, like spousal benefits, survivor benefits do not receive Delayed Retirement Credits. Thus, there is no incentive to delay these benefits beyond your Full Retirement Age.

social securityIn addition to surviving spouse, any of the deceased’s children may be eligible for benefits. Any unmarried child who is under the age of 18 (or 19 if in secondary school) may receive a benefit until their 18th or 19th birthday. There is no age restriction for a child who was disabled before age 22 and remains disabled. These benefits will continue forever. Also, a spouse who cares for a disabled child may begin their own survivor benefit as early as age 50.

Additional benefits are available for step-children, grandchildren, step-grandchildren, and/or adopted children. The deceased must have provided 50% or more of their support to qualify. The same goes for dependent parents. If the deceased provided 50% or more of the support and their parents are at least 62 years old, they may be eligible for benefits. Keep in mind, if the dependent parents begin these benefits before their own FRA, they may face a reduction.

While it’s great that Social Security offers benefits to these eligible family members, there is a cap on the total benefit that may be received. This is called the Family Maximum Benefit. The actual number varies from each family, but the total typically is 150% to 180% of the deceased’s Full Retirement Age benefit amount. However, any benefits received by a surviving divorced spouse will not impact the maximum benefit your family can receive.

As you can see, there are many factors that can apply when it comes to Social Security survivor benefits. Here are the highlights to keep in mind when dealing with these benefits:

  • Benefits may begin as early as age 60 (or 50 if caring for a dependent child).
  • Filing early will reduce your survivor benefits but not your own retirement benefit if you qualify.
  • Divorcees can receive survivor benefits if certain requirements are met.
  • No delayed benefits for survivor benefits, so it’s best to take them by your Full Retirement Age.
  • Other family members may be eligible for benefits but restrictions apply and benefits are capped.

If you have questions regarding your own Social Security benefits, please feel free to contact us today.

Will Goodson

Will Goodson

Will focuses most of his time on the Financial Synergies Pathway program, but he also supports the advisory team by creating 401(k) allocations, designing financial plans, and determining the best strategies for clients when taking Social Security. Will is a University of Texas graduate and CERTIFIED FINANCIAL PLANNER™ professional.

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