- As the saying goes, “You can’t take it with you.”
- However, when you die, your Social Security benefits stop, but your surviving loved ones may be able to claim a check that remains on your record.
- Here’s how Social Security benefits continue after your death.
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Social Security retirement benefits provide a guaranteed monthly income during your retirement years.
But when you die, your Checks stop coming.
“You only receive Social Security benefits while you’re alive,” says Bruce Tannahill, director of real estate and business planning at MassMutual.
Research shows that retirees are tempted to apply for benefits as soon as possible to get the most out of the program.
However, financial advisors usually suggest the opposite and wait until they claim they will get the most benefit. That way, you can potentially get the largest monthly check available.
“People need to consider how important Social Security is in their estate planning,” said Jim Blair, vice president of Premier Social Security Consulting and former Social Security administrator.
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For example, if you claim retirement benefits at age 62, your benefits will be reduced, and the survivor benefit you receive upon death will also be reduced, Blair said. If you delay paying your monthly Social Security retirement checks and wait to claim benefits until age 70, the maximum age at which benefits can increase, your survivor benefit will also increase.
Plus, that extra income could help you preserve other assets you can leave behind.
“Your other assets can be passed on to your spouse, other children and your loved ones,” Tannahill said.
There are some important points to know about what happens to your Social Security benefits if you or a loved one pass away.
If you meet certain requirements, you can receive a one-time death benefit of $255.
For example, if a surviving spouse lived with the deceased, they may be eligible to receive a death benefit.
If a spouse lived separately from the deceased but was receiving Social Security benefits on their record, the spouse may also be eligible to receive the $255 amount.
If there is no surviving spouse, the deceased’s children may be eligible to receive payments on their behalf, as long as they are eligible to receive benefits listed on the deceased parent’s record at the time of death.
If a beneficiary dies, the Social Security Administration must be notified as soon as possible to cancel benefits. Funeral homes often report fatalities to funeral homes. But it would be wise to also report it to the Social Security Administration, Blair said.
According to the Social Security Administration, lump-sum death benefits may be available, but any benefits received by the deceased after the month of death must be returned.
However, how this rule is handled depends on the timing of death.
Social Security checks are paid for benefits earned in the previous month. The schedule for monthly Social Security payments varies depending on the beneficiary’s date of birth and is most often on either the second, third, or fourth Wednesday.
Blair said if someone dies after receiving their monthly Social Security payments, the Social Security Administration may not be able to get that money back.
But if the beneficiary dies and receives a monthly Social Security check thereafter, it may have to be paid back, he said.
The Social Security Administration warns against cashing checks or keeping direct deposits received after the month of death.
If the deceased beneficiary was scheduled to receive a Social Security check or Medicare premium refund at the time of death; A claim may be filed to the Social Security Administration.
According to the Social Security Administration, certain families may be eligible to receive survivor benefits starting in the month of death, based on the deceased beneficiary’s income record.
This may include surviving spouses over the age of 60.
As a rule of thumb, if both spouses claim Social Security benefits and one dies, the larger benefit is likely to be larger, according to Joe Elsasser, a certified financial planner and president of Covisum, a Social Security software billing company. The money will continue, and smaller benefits will disappear.
But he noted there can be pitfalls, especially for couples who have been together for years but have never married.
Some states treat these marriages as common-law marriages and are recognized by the Social Security Administration. However, other states may not have such an arrangement, which means that survivor benefits are not available if a spouse dies.
Elsasser said he often encourages such couples to get married, especially when one partner receives very high Social Security benefits and the other does not. Of course, marriage doesn’t always make financial sense for all couples, he says.
For example, a young widow who remarries at age 59 may face other pitfalls.
“That could be very bad, because you could lose access to widow benefits under your ex-husband,” Elsasser said.
Prime Minister Tony Blair said people who remarried after the age of 60 would still be entitled to survivor benefits from their deceased spouse.
Other people listed on the deceased beneficiary’s record who may be eligible for benefits include:
- Disabled surviving spouse age 50 or older
- A surviving divorced spouse if certain conditions are met
- A surviving spouse who is caring for a child under 16 years of age or a child with a disability of the deceased.
- An unmarried child of the deceased who is under the age of 18, up to the age of 19 if attending full-time elementary or junior high school, or over the age of 18 with a disability that began before the age of 22.
“The widow benefit is actually one of the benefits that people most often miss out on because they don’t know they’re eligible for it,” Elsasser said.
For example, if you are 70 years old and divorced 20 years ago, you may not know that your ex-husband has passed away, or you may not think to check with the Social Security Administration to see if their benefits will be higher. he says.
Importantly, the Social Security Administration does not notify you that these benefits are available, Elsasser said.
In certain circumstances, other family members may be eligible to receive survivor benefits, such as adopted children, stepchildren, grandchildren, and step-grandchildren.
Parents age 62 and older may also be eligible to receive benefits if they supported at least half of the deceased’s dependents.
The family cap limits the amount that can be collected when multiple family members have claims on one record, such as a surviving mother and her three children, Elsasser said. However, he noted that this is unlikely to affect retirees as ex-partners are not counted as part of the family limit.
Additionally, in some cases, if you have income, the income test threshold may offset the amount of benefits you receive.
- A petitioner may wish to file a restricted application. Elsasser says it’s possible to claim widow benefits while increasing your own retirement benefits, or vice versa. For example, you can claim your widow’s benefit at age 60 and switch to your own retirement benefit at age 70.
- Social Security can provide a “benefits matrix” to compare benefit options. This document may show you how to compare monthly benefits to survivor benefits. “We always remind people that if they want to determine the best course of action between their own benefits and their surviving spouse’s benefits, they can contact the SSA and review the Benefits Matrix, which provides the information they need to make a decision. I’m telling you, get the report.” Mark Kiner, president of Premier Social Security Consulting, said:
- Social Security doesn’t tell you what strategies will give you the most benefits over your lifetime. Social Security agents may be able to tell you how to get the maximum benefit the same day you visit or call their office, but they won’t necessarily tell you how to get the maximum benefit for the rest of your life, Elsasser said. said. Therefore, it is best to seek more personalized external advice to identify the best strategy for your situation.