No one likes to think about losing loved ones. But, especially as you near retirement age, it’s important to plan for the future, even if it means contemplating the death of your spouse. Understanding how the Social Security Administration distributes survivors benefits can help reduce the related financial stresses of your loss.
Who is eligible for survivors benefits
Survivor benefits are not limited to the surviving spouse. Those that can receive include:
- A widow or widower age 60 or older (age 50 or older if disabled)
- A surviving divorced spouse (provided 10 years of marriage, as well as some other conditions)
- A widow or widower caring for the deceased’s child who is under 16 or disabled and receiving benefits on their record, regardless of the widow/widower’s age
- An unmarried child of the deceased who is: younger than age 18 (or up to 19 if a full-time student in elementary or secondary school) or age 18 or older with a disability that began before 22
The benefit can be up to 100 percent of what your spouse would have received at full retirement. Moreover, survivor benefits, unlike spousal benefits, don’t have to be claimed at the same time as your own retirement benefits. You can, in many cases, receive one benefit for a time and then file for the other one later. If the benefit you would receive as a survivor is higher than the benefit you receive on your own, Social Security will pay you the higher of the 2 amounts, not the two combined.
How survivor benefits accrue
When a worker pays into the Social Security system over the course of their life, they amass credits: up to four a year. In 2020, for example, workers will receive one credit for every $1,410 they earn. When your spouse has earned $5,640, they have earned their four credits for the year. In order to claim retirement, a worker needs 40 credits. However, the number of credits required to provide benefits for survivors depends on the worker’s age when they die. The younger a person is, the fewer credits they will have for family members to receive survivors’ benefits.
When someone retires, or when they die, the amount of their benefit is calculated based on their earnings over their lifetime. This is the amount that survivors will receive all or part of. To calculate their benefit, Social Security adds up the worker’s income during the years they made the most money and indexes it against average wages during those years. This results in the worker’s Average Indexed Monthly Earnings (AIME). The SS administration only includes the portion of a worker’s income up to the maximum taxable earnings limit. This is the amount that is taxed for Social Security—in 2020, that’s $137,700. If your spouse earned more than that, the higher earnings will not be included in the calculation because these monies were not taxed by Social Security.
Social Security then applies a formula to that monthly amount to determine how much your spouse would have received at full retirement. In 2020, that formula is:
- 90 percent of the first $960 of your AIME;
- plus 32 percent of any amount over $960 up to $5,785;
- plus 15 percent of any amount over $5,785.
The resulting number is the worker’s primary insurance amount (PIA). This is the amount they would have received if they applied for retirement benefits precisely at their Full Retirement Age, not before or after.
How much will you receive?
The PIA is the number Social Security uses to determine survivor benefits. And several people may be eligible for these benefits. If your spouse dies and you have children with that spouse who are under the age of 16, you may receive up to 75 percent your spouse’s PIA. Similarly, if your spouse has children under 16 by a previous marriage, that spouse may receive up to 75 percent of your spouse’s benefit. Also each child, up to the age of 18, or 19 if still in secondary school or disabled—may also receive up to 75 percent. The maximum a family can receive is up to 180 percent of the worker’s PIA. If ex-spouses receive benefits, it does not in any way impact the amount a current spouse will receive, or vice versa. However If you qualify because you have the worker’s child in your care, your benefit will affect the amount of the benefits of others on the worker’s record.
If a spouse or former spouse is not caring for the children of the deceased worker, they may still apply for benefits on their own under certain circumstances.
An ex-spouse is eligible to receive the same benefits as a current spouse if they were married to the deceased worker for at least 10 years and are not currently married. If they remarry before age 60, they forfeit their right to their former spouse’s Social Security, unless that subsequent marriage ended in death, divorce, or annulment. If they remarry after age 60, this rule doesn’t apply.
How much a spouse or former spouse receives depends on several factors including when they file for benefits and whether they are still working and earning money.
Spouses may apply for survivor benefits after age 60. If they are disabled, and began receiving disability payments before, or within, seven years of the worker’s death, they may apply at age 50. Social Security uses the same definition of disability for survivors as it does for workers.
If you apply at age 60, you will receive between 71.5 and 99 percent of your spouse’s PIA. A disabled widow or widower aged 50 to 59 would receive 71.5 percent. However, if you wait until Full Retirement Age, you are eligible for 100 percent.
Maximizing your benefit
There are many ways to plan your benefits both as a retiree and a survivor to maximize the total Social Security benefits you receive. Here are some of the different scenarios that may occur:
- Your retirement benefit is less than the one you would receive as a survivor; you can apply to receive the higher amount even if you are receiving retirement benefit payments.
- You are over 60 and remarried, and your current spouse is a Social Security beneficiary; you may apply for spousal benefits on your current spouse’s record. Whichever is higher, your own and your spousal benefits or your survivor benefits, you will receive a combination of benefits that equals the higher amount.
- You are already receiving benefits on your own record when your spouse dies, if you have been receiving them for fewer than 12 months, you may be able to withdraw your retirement application and only take your survivors benefit.
- You have been receiving retirement benefits for 12 months or more, and your spouse dies. You can only apply for survivors benefits if the benefit of your spouse’s account is more than the benefit you receive on your own.
- You have been receiving spousal benefits, and your spouse dies. Social Security will convert your benefit to survivors benefits, which are up to 100 percent of your late spouse’s full retirement benefit as compared to 50 percent for spousal benefits.
- You decide to take your survivor benefit at age 60 and wait to receive your own benefit at maximum value at age 70. This is worth examining: Let’s say your late spouse’s PIA would be $1,200 a month if you wait to take it at Full Retirement Age of 67. But if you take it at age 60, it would be between 71.5 and 99 percent of the PIA. If you received 75 percent of the PIA that would add up to about $900 a month or $10,800 annually. Meanwhile, your own retirement amount goes up by 8 percent each year.
If your PIA would be $1,000 per month at Full Retirement Age, it would be 124 percent of that amount, or $1,240 a month if you claim at age 70 (depending on your Full Retirement Age, which is determined by your birth year. It may be more.) It all depends on how much your retirement benefit would be, how much your survivor benefit would be, and how long you think you will be living and needing the money. It also depends on whether you’re working.
If you’ve reached Full Retirement Age you can earn any amount of money without impacting your Social Security benefit. But if you are earning money and taking Social Security benefits before Full Retirement Age, your benefits will be reduced. In 2020 that amount is $18,240. For every $2 you earn over that amount, Social Security will reduce your benefit by $1, though that amount will be replaced when you reach full retirement. So if you take survivors benefits at age 60, but earn $50,000 a year, you will have earned $32,000 over the limit. Social Security would reduce your benefit by $16,000. If your benefit is below $16,000 a year, you will not receive benefits.
Each situation has many factors to consider.
How to apply
A widow, widower, or surviving divorced spouse cannot apply online for survivors benefits. You must call Social Security at 1-800-772-1213 (TTY number at 1-800-325-0778.)
The money paid to survivors is money that was earned and paid in taxes by their spouse or former spouse. It is money that would have been paid to the worker had they lived to retire, and is one of the strongest benefits of Social Security.