How Social Security Survivor Benefits Work

Social Security survivor benefits are paid to spouses and dependents of the deceased to serve as an additional income stream. While these benefits are likely to only partially replace lost income, the program does intend to provide some financial relief for day-to-day living expenses.

How survivor benefits work for surviving spouses

When one spouse dies before the other, the surviving spouse can claim a survivor benefit: a monthly benefit payable for life, with the amount based on the deceased’s earnings history (the more he or she paid into Social Security, the higher the benefit for the surviving spouse). More specifically, the benefit represents a percentage (anywhere from 71.5% to 100%) of what the deceased person would have received in Social Security benefits based on his or her full retirement age (FRA).

If you’re a surviving spouse, here are some examples of the amount you’re entitled to:

·      If you claim at full retirement age or older (67 for those born in 1962 or later), you’d generally receive 100% of your spouse’s benefit.

·      If you're between 60 and full retirement age, your benefit would be 71.5% to 99% of your spouse's benefit.

·      If you’re under age 60 and caring for a child under the age of 16, you’re entitled to 75% of your spouse’s benefit amount (regardless of your age).

Please note that if you are already drawing a Social Security check on your work record, you cannot combine your benefits and your late spouse’s on a concurrent basis; and should the survivor benefit rise above the amount you’re receiving, you’ll need to call or visit your local Social Security office to apply for the survivor benefit.

If your deceased spouse was receiving Social Security benefits at time of his/her death, you must return the benefit received for the month during which he/she died as well as any subsequent months. For example, if your spouse passed away in November, you’d need to return benefits  for that month (and beyond) beginning in December. What’s more, if funds were received via direct deposit, you’ll need to contact your spouse’s financial institution and request they are returned to the Social Security Administration (or otherwise return paper checks as soon as possible).

Finally, if you remarry before age 60 (age 50, if you have a disability), you cannot receive benefits as a surviving spouse while married.

Who is eligible to receive Social Security survivor benefits?

While you already know that benefits are paid to a surviving spouse, what you may not know is that other family members are perhaps also eligible to receive survivor benefits: including your child, stepchild, grandchild, step-grandchild, adopted child, or even a surviving divorced spouse—each under various circumstances.

How survivor benefits work for other beneficiaries

The divorced spouse of the deceased can also collect survivor benefits if they were married for at least ten years, with percentages for divorced spouses mirroring those of surviving widows. Should a surviving divorced spouse remarry after age 60 (age 50, if he/she has a disability), the remarriage would not affect survivor benefit eligibility.

Minor and disabled children—provided they’re under age 18 (age 19, if full-time students) and unmarried at the time of one’s passing (or 18+ with a disability diagnosed before age 22)—are also eligible to receive a Social Security survivor benefit. In this case, the dollar value would equal 75% of the deceased’s amount.

Grandchildren and step-grandchildren, meanwhile, may qualify for benefits should their grandparent become disabled or pass away: assuming the grandchild is legally adopted by the grandparent and the child’s natural or adoptive parents are deceased or disabled. Additional conditions apply, so check with the Social Security Administration.

You can work and collect Social Security survivor benefits simultaneously

If you work prior to reaching full retirement age, the dollar amount of your monthly Social Security check is sometimes temporarily reduced if you earn more than the yearly earnings limit set by the Social Security Administration (SSA).

Based on 2023 limits, the SSA will deduct $1 from your Social Security survivor benefit payments for every $2 you earn above the annual earnings limit if you fall below your full retirement age for the entire year. In this scenario, the current limit is $21,240. Therefore, if you earn $25,000 annually, Social Security will withhold $1,880 of your benefit (as you’re $3,760 above the earnings limit).

If you work during the year you reach full retirement age, Social Security will deduct $1 for every $3 you earn above the limit. The 2023 limit—$56,520 in this scenario—only includes earnings prior to the month you reach your FRA. Therefore, if you earn $60,000 from January through October and don’t reach your full retirement age until November, $1,160 is withheld.

Keep in mind that if you’re still working when you reach full retirement age, your earnings no longer reduce your benefits no matter how much you earn.

Know that withholding means the Social Security Administration will stop sending you a check until they recoup the amount owed. For example, if you owe $3,500 and your monthly Social Security check is $1,000, you won’t receive a check for four months—with the balance owed to you ($500) refunded at a later date.

Lump sum death payment

The Social Security Administration (SSA) will pay an additional one-time lump sum payment of $255 to the surviving spouse provided he/she resided with the deceased at the time of his/her death (if not, that person would need to qualify for benefits based on the deceased’s employment record).

In the absence of an eligible surviving spouse, the lump sum can be paid to the deceased’s child (or children) if—during the month he/she passed—the child was already receiving benefits on the worker’s record or became eligible for benefits upon the worker’s death.

Eligible lump sum recipients must apply for this payment within two years of the date of death—provided they aren’t already receiving benefits.

Other considerations regarding survivor benefits

Survivor benefits are dated from when you apply and aren’t retroactive to the time of death.

When survivor benefits are paid to multiple members of one family, they become subject to the maximum family benefit as the amount Social Security will pay out is capped based on the deceased person’s earning record: with this cap generally equaling 150% to 180% of the deceased spouse’s basic benefit rate. Should collective survivor benefits exceed the cap, payments to each individual family member are thus reduced proportionately. Any benefits paid to a surviving divorced spouse, meanwhile, based on disability or age won't count toward this maximum amount.

It's not uncommon for surviving (or divorced) spouses to claim survivor benefits and—at some point down the road—switch to his/her own Social Security retirement benefit. Many people utilize this strategy to allow the surviving spouse’s benefit to increase so that, ultimately, it's more significant than the survivor benefit.

How to apply for Social Security survivor benefits

Unfortunately, an online application currently doesn’t exist for survivor benefits: meaning you need to call the Social Security Administration at 800-722-1213 to schedule an appointment. Be sure to ask which specific documents you must bring with you, as these often include your marriage certificate (or final divorce decree, if you’re applying as a surviving divorced spouse), a death certificate, your Social Security card, and your deceased spouse’s Social Security number.

In sum: Social Security survivor benefits

Social Security survivor benefits are sometimes an integral component of your financial plan. Unfortunately, the rules surrounding them aren’t the most straightforward: which is precisely why enlisting the help of a trusted financial advisor is often recommended in this respect. Read other Social Security-related articles here.

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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.

Disclosures:
This document is a summary only and is not intended to provide specific advice or recommendations for any individual or business.