Citizens of the United States typically have in mind that Social Security benefits are monthly checks that people receive when they retire. While this understanding is certainly correct, it is also vitally important to realize that there are other ways in which The federal program also provides financial assistance to its citizens.
Funded by payroll taxes, administered by the Social Security Administration (SSA) and also called the Old-Age, Survivors, and Disability Insurance (OSDAI) program, Social Security also provides benefits to people who have a disability, as long as they meet certain requirements, based on your work history and medical conditions.
But there is another method of income that the program generates for people who face a different difficult situation, the death of an eligible beneficiary.
Dependents of Social Security participants who die, including children and other family members, may also receive extended benefits.
Social Security Survivor Benefits for Couples
Social Security benefits for couples can be extended to those who are still alive in the event that one of them dies. And these benefits are generated independently of other retirement benefits, which means that people can delay one while they request collection of the other.
This creates a difficult decision that the survivor faces. At age 60, with a formula that involves the income history of the deceased spouse, the living spouse can begin receiving a survivor benefit.
Another option has the survivor wait until they reach age 62, when they can begin collecting their own retirement benefit. Doing this either way allows you to receive the other benefit later, and any decision made regarding this choice can make a big difference in the total lifetime benefits received.
An expert gave an example to explain Social Security survival benefits
Author Jim Blankenship, who writes for Retirement Daily from TheStreet, made the description of a stage for So provide help in clarifying the type of decision-making a survivor might face.
The example is that of a 59-year-old woman whose husband, a few years older than her, recently died. The man had planned to apply for Social Security benefits at age 70, but only lived to age 65. In this hypothetical case, the woman had left the workforce or had reduced her income to the point that she was no longer limited by the Earnings Test. of Social Security Retirement (RET), which can reduce benefits for people who claim them before full retirement age.
When she turned 60, the woman would be eligible to receive the survivor benefit, or she could wait until she turned 62 to collect her own benefits. Blankenship, in this example, speaks of the woman as Michelle and the man as Thomas.
The age you chose for retirement changes it all
“If Thomas had lived to his full retirement age (FRA) of 67, he would have been entitled to a benefit of $2,500 per month.” express. “Michelle also worked and got a benefit that will be $2,800 per month if she waits until her FRA (also 67) to apply for benefits.”
If the woman chose to begin receiving the survivor benefit at age 60, she would receive the minimum of $1,787. But waiting until age 67 would allow him to receive the full $2,500 a month.
“If Michelle waits until age 67, her retirement benefit would not be reduced to $2,800 a month,” Blankenship said. “If she waits until age 70 to apply, Michelle would be eligible for a maximized benefit in the amount of $3,472 per month.”
“When comparing these two situations, at first you might think that the second is the better option since it costs $173 more per month,” Blakenship added. “But Michelle would have to wait two more years before taking that option, giving up $42,888 over that period, $21,444 per year.”
