Social Security for a surviving spouse?

[ko]

I'm doing a checkup on our current retirement and life insurance situation and wanted to make sure I'm understanding something correctly. Can anyone confirm exactly how survivor Social Security benefits work?

Consider the following situation: I earn well in excess of the $127k SS cap, but have only done so for ~5 years or so. I'm 34 and my wife is a stay-at-home mom to our two young kids. If I died tomorrow, how much SS benefit would she get now?

The IRS website here (https://www.ssa.gov/OACT/quickcalc/index.html) seems to indicate that she'd get ~$2200 per month (~$25k per year) starting the month after I die, up until her full retirement age (at which point I think her benefit would go up to ~$2900 per month).

Does this sound right to any of those that have looked at this before? I'd never really given it much consideration but it sure would be nice to know my wife has another guaranteed $25k per year on top of what my life insurance would pay out if something were to happen to me at this point in life.

Thanks for any feedback.

[q-school]

most people on this site don't believe in social security, certainly not for 30 year olds.



i don't think you have it entirely right though.  i think she is eligible for survivor benefits based on her age, age of children, in addition to your contribution history.  there are for sure better experts than me.

http://www.post-gazette.com/business/finance/2013/08/02/Young-widows-face-emotional-loss-financial-shock-with-the-death-of-a-breadwinning-spouse/stories/201308020175

[Hatton]

My mother was widowed at age 35 with 2 young boys. This was in the mid 1950s.  She married my father at 38.  My brothers got survivor benefits until 23.  She saved all the checks and this is how they went to college. So those survivor benefits can really make a difference if you encounter a situation like this.

[jfoxcpacfp]

Survivor benefits are the same as the benefits you would have received at age 62 forward, but your wife could claim them as early as age 60, earlier if she is caring for children, as follows:

• If your wife does not remarry, she will receive survivors benefits at any age while she is caring for your child who is under age 16 or is disabled.


• Your unmarried children who are under 18 (up to age 19 if attending elementary or secondary school full time) can be eligible to receive Social Security benefits when you die.


• Your child(ren) can get benefits at any age if they were disabled before age 22 and remain disabled.


• Your wife could file for reduced benefits at age 60 and full benefits at retirement age or older.


• If your wife remarries before age 60, she will lose survivor benefits unless the marriage later ends.


• If your wife remarries after age 60, her eligibility for survivor benefits will not be affected.

You can download a current SS statement that details the benefits amount by signing up for an account here.

[ko]

Thanks for the input so far. And good article, q-school.

Looking at this link (https://www.ssa.gov/planners/survivors/ifyou5.html) it seems that my wife would get 75% of my benefit (which I think equates to the $2200 I mentioned in the first post) up until my kids are 16 years old, or up to 18 and still in secondary school. If I'm reading that right, that would obviously be great. It also looks like my boys may get a benefit, up to a total of 150%-180% of my full benefit for the entire family. And I think they look at my last three years of credits/payments into the SS program, so even though I'm only 34, I'm not penalized for being earlier in my career (and my average payment into the system isn't brought down).

Anyhow, any other thoughts or corrections on how I'm reading this are welcome.

And q-school: I agree that SS is a tricky topic for many on this board. And I also don't personally plan on it as it looks today for my own retirement, which will be in 20-30 years. However, my thinking is like this: for a survivor benefit, we'd be talking about something in the next 5 or 10 years (and I'm concerned with years 0 to 5 from today the most). And I think SS has a much higher likelihood of looking the way it looks today for the next 5 years, obviously. And additionally, I still have a few million in life insurance on myself - a SS survivor benefit would just be a little extra cushion if my wife/kids were to get it. But I could obviously be wrong and it would be unwise to plan for a SS survivor benefit as a key component of our plan if something happens to me.

Thanks again for the thoughts.

[ko]

jfoxcpacfp wrote:

Survivor benefits are the same as the benefits you would have received at age 62 forward, but your wife could claim them as early as age 60, earlier if she is caring for children, as follows:

• If your wife does not remarry, she will receive survivors benefits at any age while she is caring for your child who is under age 16 or is disabled.


• Your unmarried children who are under 18 (up to age 19 if attending elementary or secondary school full time) can be eligible to receive Social Security benefits when you die.


• Your child(ren) can get benefits at any age if they were disabled before age 22 and remain disabled.


• Your wife could file for reduced benefits at age 60 and full benefits at retirement age or older.


• If your wife remarries before age 60, she will lose survivor benefits unless the marriage later ends.


• If your wife remarries after age 60, her eligibility for survivor benefits will not be affected.

You can download a current SS statement that details the benefits amount by signing up for an account here.

Click to expand...

Ah, thanks Johanna, looks like you posted that while I was typing my last post.

One of the key questions for me was how my income is treated if I died for determining the amount of the survivor benefit, given that I hadn't actually worked at a high income for more than ~5 years. Looks like they (SS) just look at the last three years from what I saw in the linked pages - does that sound right to you? In other words, if I'd earned over the SS cap (~$127k this year) for the last 5 years, my wife's survivor benefit would be similar to a benefit for a retired person that had been earning in excess of the cap for their entire career, correct?

[jfoxcpacfp]

ko wrote:

One of the key questions for me was how my income is treated if I died for determining the amount of the survivor benefit, given that I hadn’t actually worked at a high income for more than ~5 years. Looks like they (SS) just look at the last three years from what I saw in the linked pages – does that sound right to you? In other words, if I’d earned over the SS cap (~$127k this year) for the last 5 years, my wife’s survivor benefit would be similar to a benefit for a retired person that had been earning in excess of the cap for their entire career, correct?

Click to expand...

That is not my understanding, but I am no expert in this area. Perhaps you can include the link where you found that information.

[DevinCarroll]

ko wrote:

jfoxcpacfp wrote:

Survivor benefits are the same as the benefits you would have received at age 62 forward, but your wife could claim them as early as age 60, earlier if she is caring for children, as follows:

• If your wife does not remarry, she will receive survivors benefits at any age while she is caring for your child who is under age 16 or is disabled.


• Your unmarried children who are under 18 (up to age 19 if attending elementary or secondary school full time) can be eligible to receive Social Security benefits when you die.


• Your child(ren) can get benefits at any age if they were disabled before age 22 and remain disabled.


• Your wife could file for reduced benefits at age 60 and full benefits at retirement age or older.


• If your wife remarries before age 60, she will lose survivor benefits unless the marriage later ends.


• If your wife remarries after age 60, her eligibility for survivor benefits will not be affected.

You can download a current SS statement that details the benefits amount by signing up for an account here.

Click to expand…

Ah, thanks Johanna, looks like you posted that while I was typing my last post.

One of the key questions for me was how my income is treated if I died for determining the amount of the survivor benefit, given that I hadn’t actually worked at a high income for more than ~5 years. Looks like they (SS) just look at the last three years from what I saw in the linked pages – does that sound right to you? In other words, if I’d earned over the SS cap (~$127k this year) for the last 5 years, my wife’s survivor benefit would be similar to a benefit for a retired person that had been earning in excess of the cap for their entire career, correct?

Click to expand...

Your calculations are correct. For purposes of some survivor's benefits, the SSA will use the alternate qualification of "currently insured status" to determine eligibility for benefits. Instead of the 40 quarter requirement that is required for "fully insured status," the requirement for "currently insured" is simply 6 credits in the last 13 quarters.

The only class of benefits that I've found this applies to is Children's benefits and Child-In-Care benefits (also called mother's/father's benefits). This would provide the following benefits:

• Surviving Spouse - 100% of your PIA (full retirement age benefit)


• Surviving Children - 75% of your PIA

However, this is capped by the Family Maximum which is somewhere between 150% and 180% of your PIA.

There's more information on this SS website page. https://secure.ssa.gov/poms.nsf/lnx/0300301101

One last note. As high income earners, I understand why you don't want to count on SS for retirement. However, SS does a lot more than retirement.

In 2014 there were nearly 3.3 million children receiving benefits.
—350,000 from a retired parent
—1,634,000 from a disabled parent
—1,245,000 from a deceased parent

34% of all Social Security benefits are paid to the spouses and children of retired, deceased or disabled workers.

54 years old is the average of a disabled worker

Just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67.

Hope this helps you out!

-Devin

[StarTrekDoc]

As q said, SSA shouldn't be relied upon IMHO.

Locking into a good 20year Term Life insurance is cheap, easy, and reliable to ensure the little ones and SO and allow you to sleep and travel without governmental worries.