The Social Security system has provisions for taking care of surviving spouses of workers who have earned credits under the system. There are two particular benefits that you should be aware of – a small death benefit of $250, and a Survivor Benefit based upon the worker’s Primary Insurance Amount. It is the latter benefit that we are discussing today.
The Social Security Survivor Benefit
When a primary wage earner dies, the Social Security system has a way to help care for the surviving spouse. The Survivor Benefit is generally equal to the primary wage earner’s retirement benefit – this benefit replaces other spousal retirement benefits (the one that is equal to 50% of the primary wage earner’s benefit, available while the primary wage earner is living – see here
for more detail).
The mechanics of the Social Security Survivor Benefit can apply to widows or widowers at various ages, depending upon the circumstances, as well as to the children and/or parents of the primary worker. We’ll cover each sort of individual in turn…
Widows and Widowers
When the primary wage earner dies, the surviving spouse is entitled to receive a retirement benefit based on the primary wage earner’s retirement benefit. Of course, if the surviving spouse’s retirement benefit based upon his or her own record is equal to or more than the deceased spouse’s benefit, the surviving spouse will continue to receive his or her own retirement benefit.
If the surviving spouse elects to begin receiving survivor benefits before Full Retirement Age (FRA), the benefit is subject to actuarial reduction. Since a surviving spouse is eligible to begin receiving early benefits at age 60 (instead of age 62 for regular or spousal benefits), the “usual” age table is changed by 2 years. Whereas FRA for regular or spousal benefits for those born between 1943 and 1954 is age 66, for a survivor benefit, FRA for those born between 1945 and 1956 is age 66. (See this article
for the FRA ages and this article
actuarial adjustments. Adjust the ages and years by 2 for Survivor Benefit.) If the surviving spouse is disabled, early benefits may be received any time after age 50, with the actuarial reduction assuming benefits begin at age 60 (no further reduction, in other words).
In addition to the benefit mentioned above, there is a Survivor Benefit available to a younger spouse if there are children under age 16 that the surviving spouse is caring for, or a child of any age who has become disabled before age 22. This Survivor Benefit is equal to 75% of the FRA benefit of the deceased spouse – and only lasts until the child reaches age 16. At the same time, each child under age 18 will receive a Survivor Benefit (more on this later) until age 18.
It should be noted that there is no increase in benefits by delaying receipt of benefits after FRA, so a widow or widower should begin receiving Survivor Benefits at FRA and no later.
It should also be noted that divorced spouses who survive a deceased worker are also eligible for the Survivor Benefit.
Any child under age 18 (19 if attending school) who survives a deceased worker that has earned the maximum credits is eligible to receive a Survivor Benefit equal to the actuarially reduced amount of the FRA of the deceased parent. This amount is 75% of the FRA benefit of the surviving child’s parent, and this benefit will be payable until the child reaches age 18 (or 19).
In addition to the children of the deceased worker, this benefit can be available to step-children, grandchildren, step-grandchildren, or adopted children of the deceased worker, if the deceased worker provided 1/2 or more support to the child.
Surviving Parents Over Age 62
In the event that the deceased worker had provided more than 1/2 of the support of one or more older parents (over age 62), the surviving parents are eligible to receive a Survivor Benefit as well. This Survivor Benefit is based on the age of the surviving parent, and actuarial reductions apply to these benefits if received before FRA of the survivor.
For the whole family of the deceased wage earner, that is, surviving children under 18, spouse and parents, there is a maximum benefit amount that applies – equal to between 150% and 180% of the deceased worker’s basic benefit (the calculation is complicated, using the bend point formulas). The Social Security website has a calculator to help you understand this amount.
Bear in mind that any Survivor Benefit received by a surviving divorced spouse to not count toward this family maximum.