More than 5.9 million people were receiving Social Security survivor benefits in May 2021. Typically, monthly payments go to the spouse, or children of the person who was receiving Social Security benefits. In certain situations, parents, grandchildren or stepchildren of a late worker may also qualify for survivor benefits.
Survivor benefits are based on the amount the deceased was receiving from Social Security at the time of death. Here are 5 facts about survivor benefits and how it will better prepare you and your family in the case of a loved one passing.
- Social Security benefits are paid monthly
The government pays Social Security benefits monthly. The benefits are paid in the month following the month for which they are due. For example, you would receive your July benefit in August. Generally, the day of the month you receive your benefit payment depends on the birth date of the person for whose earnings record you receive benefits.
For example, if you get benefits as a retired worker, we base your benefit payment date on your birth date. If you receive benefits based on your spouse’s work, we base your benefit payment date on your spouse’s birth date.
- They don’t pay benefits for the month of death
If a person receiving Social Security benefits dies, the social security office needs to be notified. They can’t pay benefits for the month of death. That means if the person died in July, the check received in August (which is payment for July) must be returned.
If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. Family members may be eligible for Social Security survivors benefits when a person dies.
- Survivors' benefits can replace a percentage of the worker’s earnings for family members
The eligible family members of a retired or disabled beneficiary may receive a monthly payment of up to 50 percent of beneficiary’s amount. Survivors' benefits usually range from about 75 percent to 100 percent of the deceased worker’s amount.
- Work credits determine eligibility for benefits
You can continue to work and still get Social Security retirement benefits. Retired workers need 40 work credits to be eligible for benefits, but your work credits alone do not determine how much you will receive each month. Your lifetime earnings are used to calculate your monthly benefit amount. When we figure your retirement benefit, we use the average of your highest 35 years of earnings.
Your earnings in and after the month you reach your full retirement age won’t affect your Social Security benefits. They will reduce your benefits, however, if your earnings exceed certain limits for the months before you reach your full retirement age. The full retirement age is 66 and 10 months for people born in 1959 and increases to 67 for people born in 1960 or later.
- If you receive retirement benefits before you reach age 65, you will be automatically enrolled in Medicare.
When you’re already receiving retirement benefits, we automatically sign you up for Medicare Parts A and B when you turn 65. Medicare Part Ais hospital insurance and it helps pay for inpatient care in a hospital or skilled nursing facility following a hospital stay. It also pays for some home health care and hospice care. Medicare Part B is medical insurance, and it helps pay for services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventative services.
When you're signing up for a plan, you can decline Part B if you decide you choose not to take part in it, this plan requires a monthly premium. It's important to know your options and all the costs that come with healthcare plans when you're planning for retirement. If you are not receiving retirement benefits as you approach age 65, you should contact Social Security three months before age 65 to sign up for Medicare Part A and B.
Survivor Benefits could help take care of your loved ones if you die prematurely. The most accurate way to determine your potential survivors' benefits is to create an account at www.ssa.gov and view your Social Security statement. In addition to information about your own benefits, you can find estimated survivors benefit amounts, whether you've earned enough credits for your family to qualify, and the maximum total survivors benefits that could be collected on your work record.
As always, the team at Agemy Financial Strategies are here to help you plan for retirement, including making sure you're aware of every financial benefit available to you as you enter your golden yeas. Contact us here today to learn more.