Social Security Survivors Benefits -- What You Need to Know

There's a lot more to Social Security than just retirement benefits. One of the lesser-known parts of Social Security is survivors benefits, which can provide much-needed income for the families of workers who pass away.

Here's a guide that can help you determine if your survivors would be eligible for benefits, who could potentially collect a survivors benefit if you die, how much they could get, and whether survivors benefits would be enough for your loved ones to live on.

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Are you eligible for survivors benefits?

To be eligible for Social Security retirement benefits, American workers need 40 "credits," which essentially means 10 years of work at Social Security-covered employers. For survivors benefits, the number of credits required depends on how old the worker is when they die. Younger workers need to have earned fewer credits than older workers for their survivors to be eligible for benefits, but nobody needs more than the basic 40-credit requirement.

The best way to find out if you're eligible for survivors benefits is to look at your most recent Social Security statement. You can get yours through www.ssa.gov, and you'll need to create an account if you haven't already done so in order to view your statements.

In addition to your eligibility for survivors benefits, your Social Security statement contains information regarding how much you're projected to receive for retirement benefits, how much you could get if you become disabled, and other valuable information. I highly recommend reviewing yours annually.

Which survivors could get benefits if you die?

One of the most important things to know is the Social Security Administration's (SSA) definition of a "survivor." When it comes to survivors benefits, the following people may be eligible to draw a benefit based on your work record:

• Your children: For your children to be eligible, they must be under 18 years old or as old as age 19 and still in high school. Also, adult children with a disability that began before age 22 are eligible.
• Your surviving spouse: Surviving spouses can receive a benefit if they're age 60 or older, age 50 or older and disabled, or any age and caring for your child who is under age 16 or disabled. Surviving ex-spouses can also be eligible under certain circumstances.
• Your parents: If your parents depend on you for at least half of their support and are over age 62, they could be eligible for a survivors benefit if you die.
• Other relatives: Under certain circumstances, stepchildren, grandchildren, stepgrandchildren, and your adopted children may be eligible.

How much would your survivors get?

The amount of your survivor's potential monthly benefit in the event of your death depends on three main factors:

• How much your monthly Social Security retirement benefit would have been at full retirement age (projected).
• The survivor's relationship to you.
• How many survivors will be drawing benefits on your work record.

Let's take these one at a time.

First, your expected full retirement benefit depends on how much you've earned during your career so far, as well as how much the SSA expects you'll earn for the rest of your career. The SSA uses a benefits formula that changes slightly each year to determine a worker's full retirement benefit. This is also known as your primary insurance amount, or PIA. In simple English, survivors of higher-income workers would receive higher monthly survivors benefits than survivors of lower-income workers.

Next, the SSA considers each survivor's relationship to you and sets their maximum survivor benefit as a certain percentage of your primary insurance amount.

Data Source: Social Security Administration (SSA).

Third, the SSA considers how many survivors are qualified to receive a benefit based on your work record. There's a maximum amount of monthly benefits that can be paid on a single worker's record that's between 150% and 180% of PIA, depending on the specific situation. If the chart results in more benefits paid out to your survivors than the maximum, everyone's benefit will be reduced proportionally.

Examples

Let's say that you've earned enough Social Security credits to qualify for survivors benefits and you're projected to receive a $1,500 monthly Social Security benefit at full retirement age. If you die and leave behind a 45-year-old spouse and a 10-year-old child, each of these individuals would be entitled to 75% of your full retirement benefit, or $1,125 per month each. Because this adds up to 150% of your full retirement benefit, it would not be reduced -- both survivors would receive this full benefit amount each month.

On the other hand, let's say that the same individual leaves behind a 45-year-old spouse, two dependent children, and one dependent parent. In this case, according to the chart, the spouse and children would each be entitled to $1,125 per month and the dependent parent would be entitled to $1,237.50.

However, these benefits add up to 307.5% of your full retirement benefit. If your maximum payable benefit is 180% of your full retirement benefit, all of your survivors would have their calculated benefits reduced by about 41% in order to ensure the maximum isn't exceeded. This would result in monthly benefits of about $658 each for your spouse and children and $724 for your dependent parent.

How many Americans collect survivor benefits?

As of April 2018, just over 6 million Americans receive survivor benefits, with an average monthly benefit amount of $1,153.04 per survivor. Here's how that breaks down by type of beneficiary:

Data Source: Social Security Administration.

How to apply for survivors benefits

Unlike Social Security retirement benefits, survivors can't apply for benefits online. The only ways are over the phone or in person at a Social Security office. (Note: If you decide to apply in person, I highly recommend making an appointment to avoid a long wait time.)

To apply, you'll need proof of death, which is typically handled by the funeral home. (If not, a death certificate will suffice.) You also will need Social Security numbers for yourself and the deceased worker, your birth certificate, your marriage certificate (if the deceased was your spouse), divorce papers (if applicable), Social Security numbers and birth certificates for dependent children, and the deceased worker's most recent W-2 or tax return.

Do you still need life insurance?

The short answer is "probably." Consider that Social Security retirement benefits are only designed to replace about 40% of the average worker's income, so it's fair to expect that the same can be said of survivor benefits. Even if your survivors collect the maximum of 180% of your full retirement benefit, this still only replaces less than three-fourths of your income.

The bottom line is that Social Security survivors benefits are certainly a valuable financial tool in the event that you're no longer around to earn money for your family, but that doesn't mean they are the only source of financial support your family would need after you're gone.