Social Security benefits financially support many Americans, providing a safety net during retirement. While paychecks continue throughout your lifetime, it’s important to understand what happens to Social Security when you die. Survivor benefits may be available for loved ones, and there is a one-time benefit that will be paid out after you die.
To prepare for what happens to Social Security benefits when you die, it’s a good idea to know about the following:
— Social Security benefits and death
— Factors that affect Social Security benefits after death
— Eligibility for survivor benefits
— Understanding the one-time death benefit
— How to claim survivor benefits
— Common misconceptions regarding Social Security after death
— Steps for managing Social Security after death
Social Security Benefits and Death
The Social Security program includes provisions for surviving family members to ensure they are not left without financial assistance. This includes survivor benefits for eligible individuals, plus the one-time death benefit.
To prepare for what’s ahead, you can look at your current or estimated benefit amount by accessing your my Social Security account. Compare your benefits to what others in your household currently receive or will be eligible to receive. Look at your full retirement age, which is the milestone for applying for the full amount of your benefit.
Factors That Affect Social Security Benefits After Death
Claiming benefits before your full retirement age will result in a reduced monthly amount, and that lower figure will be passed on to your survivor after your death. However, if you wait, the higher amount will be sent to the survivor, provided they are full retirement age or older.
“More times than I can count, I’ve encountered higher-earning spouses that wanted to begin drawing Social Security benefits early, primarily due to concerns about not living long enough to warrant delaying benefits for several years,” said Stephen Barns, a financial advisor at Prime Capital Investment Advisors in Little Rock, Arkansas, in an email.
“When we have a conversation and gain an understanding that taking a lifetime reduction in benefits also applies to our surviving spouse, that discussion often leads to a decision to postpone benefits, allowing them to grow and be used in the future.”
[Read: What Is a Good Monthly Retirement Income?]
Eligibility for Survivor Benefits
If you’re married, your spouse could qualify for survivor benefits after your death.
“To be eligible for survivor benefits, the surviving spouse must generally be at least 60 years old, or 50 if disabled, and have been married to the deceased individual for at least nine months,” said Marcus Miller, a certified financial planner at Mainstay Capital in Jacksonville, Florida. “However, there are exceptions to this rule, such as in cases of accidental death or if the surviving spouse is caring for a child under the age of 16.”
In some circumstances, a divorced spouse could be eligible to receive benefits like a surviving spouse, as long as the marriage lasted at least 10 years. Dependent parents who are at least 62 may also qualify for survivor benefits.
Understanding the One-Time Death Benefit
In addition to ongoing survivor benefits, Social Security provides a one-time death benefit to help cover funeral expenses. This is a lump-sum payment offered to the deceased worker’s surviving spouse or child. That amount is $255 and is paid to the surviving spouse if they live with the deceased. In the case of no surviving spouse, the payment is made to an eligible child. The child must be on the deceased’s record in the month of death.
How to Claim Survivor Benefits
If you are a survivor of someone with Social Security benefits, you’ll first want to examine your situation.
“Before tapping into these benefits, consider your age, your own employment history and current financial needs,” said Michael Ryan, a financial literacy advocate in Boynton Beach, Florida, in an email. “Taking benefits before full retirement age can result in a reduced amount.”
In addition to your age, other factors will impact what you receive. “The amount hinges on the earnings record of the deceased and the age of the survivor,” Ryan said.
Contact the Social Security Administration to begin receiving survivor benefits. You can call 1-800-772-1213 to report a death and apply for benefits. You can also contact your local Social Security office. It is not possible to report a death or apply for survivor benefits online.
[Read: How to Correct Your Social Security Earnings Record.]
Common Misconceptions Regarding Social Security After Death
While it may seem that Social Security benefits disappear after death, the system is set up to continue supporting dependent family members.
That said, applying for and receiving survivor benefits may take some time and effort. “A lack of proper documentation or navigating the bureaucratic maze can be stumbling blocks,” Ryan said. Once you have everything in place, you’ll need to make sure you fit the criteria. “Eligibility issues, like insufficient work history or ineligibility due to remarriage, can also arise,” Ryan said.
Steps for Managing Social Security After Death
If you’re a surviving spouse or family member, you’ll want to report the death as soon as possible to the Social Security office.
Once you’ve had a chance to review your finances, you can decide whether you want to apply for survivor benefits. You can expect to receive the one-time death benefit if you are a surviving spouse who was living with the deceased at the time of death or if you are a child who qualifies. Take the time to review documents and the benefit amounts to make the best decision about survivor benefits.
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What Happens to Social Security Benefits When You Die? originally appeared on usnews.com
Update 11/27/24: This story was published at an earlier date and has been updated with new information.
