Who Will get Your Social Safety If You Die Tomorrow?
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Editor’s note: This story originally appeared on The Penny Hoarder.
Most of us never see the first 6.2% of our paychecks. This money goes straight to Social Security with the main goal of one day providing you with a monthly retirement pension.
But what if you suddenly die tomorrow? What happens to all of the money you put into the system?
First, let’s address a common misconception: Social Security doesn’t put money in an account for you. Your income taxes finance the Social Security Trust. Once you are eligible, you will receive benefits from the trust. But the Social Security Agency doesn’t have a pot of money with your name on it.
If you die, your social security payments will stop. If you die before the start of the benefits, you will not receive the paid-in money.
But sometimes someone else may receive benefits based on your records. This is the case for spouse, spouse and survivor benefits. Another person may be able to get social security benefit based on your benefit – but they won’t get your social security benefit.
If you have a spouse, ex-spouse, or dependent, they may be able to use your records to be eligible for survivor benefits when you die. Here’s who gets what.
If you’ve never been married and have no loved ones
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Nobody will receive survivor benefits based on your file if you have never married and have no children or other dependents.
The money you deposited is simply part of the Social Security Trust. It is used to pay the other social security obligations.
When you are married
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Your spouse is entitled to survivor benefits when they turn 60 (or 50 if they are disabled) if you have been married for at least nine months and they have not remarried.
However, you will only receive the survivor’s benefit if it is higher than your own social security benefit. In other words, social security gives them the greater of the two, but not both.
Your benefit depends on:
- Whether you were receiving benefits at the time of your death: If you died before the start of benefits, your spouse’s benefit is based on your primary insurance amount. This is the benefit you are entitled to at retirement age. However, if you die after starting your social security, your spouse’s benefit will be based on your performance. For example, if you applied for Social Security when you were 62, but your retirement age is 67, your monthly checks will be a third lower. Your spouse’s benefit is based on this lower amount.
- How long your spouse is waiting: If your spouse applies for survivor benefits before reaching full retirement age, they will receive between 71.5% and 99% of your benefit – your amount of primary insurance if you have not started or your actual benefit if you have.
If you leave a spouse to look after your child under the age of 16 or have a disability, they will receive 75% of your benefit regardless of their age.
When you are divorced
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Former spouses are generally entitled to the same survivor benefits as current spouses, provided they have been married for at least 10 years and divorced for 2 years.
If you have remarried and your ex-spouse applies for survivor benefits based on your file, this will not affect your current spouse’s performance.
If you have underage children
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All children under the age of 18 (or under 19 if they are still in high school) are entitled to 75% of your benefit provided they are not married. That’s in addition to the 75% your current or former spouse can get for looking after your child.
However, social security has a maximum family benefit of 150% to 180% of your primary insurance amount.
So if you die tomorrow and your spouse and four children under the age of 16 survive, they will still only receive 150% to 180% of your benefit.
When you have grown up children
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Your children over 18 (or 19 if they are still in high school) are not eligible for survivor benefits. Exception: If you are at least 22 years old, unmarried and have a disability that began before the age of 18, you can receive 75% of your benefit.
When your parents are dependent on you
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If one of your parents is dependent, ie you are paying at least half of their support, you can be entitled to survivor benefits. You are only eligible if you are 62 or older when you die. You can receive up to 75% of your benefit amount – but only if the survivor benefit is higher than your own benefit.
Are the survivors’ benefits sufficient?
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Survivor benefits can certainly help your loved ones after you die, but they are not enough to protect your family, especially if you have young children. A Value Penguin survey found that a widowed spouse would care for two children with an average monthly deficit of $ 2,695.
When you have loved ones who depend on you, life insurance is a must. A common guideline is to buy life insurance that covers ten times your annual income. However, this may not be enough if you have children whose college education you want to pay for, or if you and your spouse have significant debts.
It’s also important to have a will and keep it up to date. If you have a 401 (k) plan or an individual retirement account (IRA), be sure to review your listed beneficiaries at least once a year. The listed person (s) will receive the money regardless of the instructions in your will.
The money you put into social security can help your loved ones when you die tomorrow. But be realistic. If you have dependents, survivor benefits alone are unlikely to be enough.
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