Retired couple holding hands

How Do Survivor Social Security Benefits Work?

Social Security is a robust system that provides aid to disabled workers, minor children, and surviving spouses/dependents. In fact, according to AARP, nearly 5.9 million people were collecting survivor benefits in 2020. Survivor benefits play an important role in the social security system, making it imperative that you know what it is, how it works, and when it might impact you.

What are survivor benefits? 

Survivor benefits are provided to a spouse or dependent upon the death of someone in your family. These benefits are extended to spouses, ex-spouses, children, and other dependents. 

Like traditional benefits, you typically need to work for 10 years, or accumulate 40 work credits, for your family members to be eligible to claim survivor benefits off of your work record. There is an exception should you pass away and leave behind a spouse and a minor child, at which point you only need 6 work credits within three years of your passing. 

Below are the basic qualifications for survivor benefits:

  • A widow/widower who is 60 years old (50 if they have a disability) and has not remarried
  • A widow/widower who is caring for a minor child
  • An unmarried minor child
  • Parents, 62 or older who were financially dependent on the deceased
  • Ex-spouses if their marriage lasted at least 10 years, they meet the age requirement, and have not remarried
    • If an ex-spouse has remarried before the age of 60 they aren’t eligible for benefits. 
  • Additional relatives like step-children and grandchildren

As you can tell, there are many different people who can benefit from this service. But what do these benefits look like in practice? 

How much can you expect from survivor benefits?

The Social Security Administration does pay a one-time death benefit of $255 to the surviving spouse if they were living together. In lieu of a surviving spouse, the money would go to a child. 

Survivor benefits are calculated by the maximum amount that a person would collect if they were still living. This means that the time you elect to enroll in social security impacts more than just you, it impacts the people who are left behind. 

If you collected benefits as early as 62 and incurred a permanent 30% reduction in payments, a survivor benefit would be based on that reduced amount, not the primary insurance amount you would have received had you collected at full retirement age. 

This idea also applies to the person claiming benefits. While a spouse can technically file for survivor benefits as early as 60, they will see a reduction in benefits for every year that they claim before their own full retirement age. The only way to get 100% of the survivor benefit is by collecting at full retirement age, a tried and true rule of Social Security benefits. Should a surviving spouse apply at any point between 60 and their full retirement age, they can expect to receive anywhere from 70% to 99% of the total benefit. 

Minor children can receive up to 75% of their deceased parent’s benefit and dependent parents can receive anywhere from 75% to 82.5% of the benefit depending on if one person is filing or two. A widowed spouse caring for a minor child can also receive up to 75% of the total benefit. Ex-spouses can receive the same amount as a current spouse given that they have met the other criteria outlined above. 

These rules make social security planning even more important. If you are married, you want to ensure that you create a strategy to maximize benefits both now and in the future.

Married couples can maximize benefits

In the wake of loss, it can be difficult to manage both emotional and financial tasks. This makes it important to plan for and maximize your social security benefits ahead of time. Keep in mind that spouses who have not yet claimed Social Security benefits can decide to either file on their own record or take the survivor benefit. This usually comes down to maximizing the monthly payments. 

If you have your own work record, for example, you could begin collecting your survivor benefit as early as 60 (understanding a reduction in the survivor benefit) and let your own work record grow until 70 and switch the application. This is just one example of a strategy you could use to make the most of the benefits available to you. 

If you have already begun collecting benefits, though, the Social Security Administration will only pay the benefit off of your work record or the survivor benefit, whichever is higher. This also makes early Social Security planning an important aspect of your retirement income strategy. 

A married couple might consider delaying the higher earner’s benefit (until 70) which not only maximizes monthly payments but also an eventual survivor’s benefit. Your financial planner will be able to help walk you through your options and devise a plan that makes the most sense for you and your goals.

Social Security and retirement income

Social Security is projected to replace about 40% of your retirement income. Understanding what your benefits are, how they work, and maximizing your strategy to collect will increase your monthly checks and significantly impact not only your retirement income but also that of a spouse or other dependent when you pass away. 

Benefits can seem like a maze of government red tape, but we know all the details. It’s imperative to have someone in your corner who knows what to look for, the mistakes to avoid, and the ways to make the most of the system you. 

Ready to revamp your Social Security strategy? Schedule a time to talk with a team member today.

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