There’s a lot of confusion around Social Security retirement benefits – and considerable misinformation – in American society. If you have questions, you’re not alone.
If you’re preparing to put your estate plan in place, it’s important to know who in your life may be eligible to collect Social Security survivor benefits based on your earnings history when you’re gone. It could affect your other estate planning decisions – particularly if you’re concerned about how your loved ones will fare financially without you.
Spouses are often the beneficiaries
Surviving spouses are eligible to receive survivor benefits as long as they’re at least 60 years old (50 if disabled and any age if they’re caring for a minor or disabled child belonging to the deceased).
Surviving ex-spouses can also receive survivor benefits if they meet certain requirements. Minor and disabled children can also be eligible for survivor benefits. So can some dependent parents of the deceased.
A person can only collect one set of benefits
If you’re planning for how much income your spouse will have when you’re gone, it’s crucial to know that a person can only collect retirement benefits based on their own work record or survivor benefits based on their spouse’s (or other relative’s) record — not both.
Specifically, the Social Security Administration (SSA) will pay them whichever benefit is higher. The SSA will determine when they file for benefits which amount is higher and pay that. If your spouse’s lifetime earnings are higher than yours, they’ll be paid based on their record – not yours.
That doesn’t mean you can “leave” your survivor benefits to someone else of your choice. A person either qualifies under SSA rules to receive them or they don’t.
How much will they receive?
The percentage of the deceased’s retirement benefits a survivor receives is based on a number of factors. These include things like their relationship and how old they are when they file. For example, a surviving spouse who waits until their own “full retirement age” under SSA rules to collect benefits can potentially get 100% of their late spouse’s benefit.
This is important and often necessary compensation that people have earned throughout their working years. It’s worth determining whether your benefits will continue to help support your loved ones after you’re gone. It’s smart to learn more about how these benefits may fit into your estate planning process accordingly as well.