Most people reading this have known someone who died prematurely. Too often, the family’s grief is compounded by financial stress and uncertainty. The first thing that goes through my mind when I hear a story like this is, “I hope they had enough life insurance.” However, another source of financial support for these young families is Social Security Survivor benefits.
Social Security Survivor Benefits – society’s safety net:
Social Security was designed as society’s safety net. We typically think of Social Security in terms of retirement. However, Social Security survivor benefits and disability benefits are also important elements of the program.
When a parent of minor children dies, each child is typically entitled to 75% of the decedent’s Social Security benefit. Children can collect until they turn 18 (19 if they are in high school). The surviving spouse can also collect benefits if he or she is over the age of 60 or is caring for a child under the age of 16.
Family maximum limits benefits for large families:
There is a family maximum, which varies, but it is typically 150-180% of the amount the worker would have received in Social Security Retirement Benefits at his or her full retirement age. Benefits are reduced proportionally if there are too many family members who qualify.
The surviving spouse can also receive a one-time lump sum of $255 for funeral expenses. That is not a typo; it really is only $255. I am not sure how much $255 is going to help. The average funeral in America costs $7,000 – $10,000, and in many locations, it is far more.
Social Security Survivor benefits can get complicated. There are various benefits, exceptions, and limitations for disabled spouses and/or children, as well as parents of the deceased who were financially dependent on their adult child. For more information on Social Security, check out: Social Security – Frequently Asked Questions.