14 June 2013 0 Comments

More On Social Security Survivors Benefits

_wsb_307x231_Man-Handing-out-Money From the feedback I got on my last entry, it’s clear that many of you were not aware of the significant death benefits available to the children and spouse of a deceased covered worker.  My comments on this benefit should not be taken as an official statement from Social Security, but as an indicator of what might be available for you and the protection of your family.  I encourage you to go directly to www.socialsecurity.gov/mystatement and create your own statement.  If you are a worker age 18 or over you can get a statement on line.

You’ll notice from my prior entry that there is a “blackout” period for benefits paid to a spouse.  A surviving spouse of a deceased worker will receive a monthly benefit based on the deceased worker’s earnings under either of these circumstances:   if they are caring for the child of the deceased worker, or they have reached at least age 60.  The child being cared for must be under age 16, or disabled.  Don’t confuse this with the child’s benefit which is paid to the child through age 18 (19 if they are still in an elementary or secondary school).   But, in most circumstances there will be a Social Security “blackout” period of spouse benefits between the youngest child’s 16th birthday and the spouse’s age 60.  This is something to take into account when planning your life insurance program.

The benefit paid to the surviving spouse caring for a child of the deceased worker can be reduced based on the amount of income earned by that surviving spouse.  This is another factor to consider when planning life insurance.  If the widowed spouse must go to work to supplement income, it could mean a reduction in benefits paid by Social Security.  This is especially true when there are fewer than 3 minor children, due to the family maximum limitation.  Be sure to have enough life insurance to cover the shortfall if only Social Security payments are available.

When the surviving spouse attains age 60 he or she can elect to begin their survivor benefit based on the income of their deceased spouse.  They might also be eligible to receive Social Security retirement benefits based on their own earnings.  Since both spousal survivor benefits and retirement payments will not be paid (the maximum of the two would be paid) the spouse might defer their own retirement benefits to a later age in order to maximize payments.

Social Security survivor benefits should not be viewed as a replacement for personally owned life insurance, but a base upon which to build.  Having a government program that produces some income for a surviving spouse and children means that personal life insurance can produce a comfortable standard of living for those left behind; money to pay off the mortgage, provide a college education for the kids…with a little left over for those extras for which the deceased parent will always be remembered.

Next…the real power of life insurance.

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