Please ensure Javascript is enabled for purposes of website accessibility

Here's How Social Security Is Shortchanging Some Beneficiaries

By Maurie Backman – Jun 18, 2020 at 7:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Some seniors are collecting less money from Social Security than they're actually entitled to.

Social Security doesn't just provide retirement benefits to those who earn enough work credits in their lifetime to qualify for them; it also provides benefits to the people they leave behind when they pass. But a new report released by the Social Security Administration's Office of the Inspector General reveals that over 15,000 surviving spouses are getting shortchanged on the benefit front. The reason? They're still collecting benefits on their own work records despite the fact that they're entitled to higher benefits as .

How survivor benefits work

If you're married to someone who's collecting Social Security and your spouse passes away, you're entitled to 100% of your deceased spouse's monthly benefit once you reach full retirement age. You can claim survivor benefits starting at age 60, which is earlier than the minimum age to collect Social Security benefits on your own work record, but if you do, you'll reduce the amount you get to collect each month.

Older woman looking out window

Image source: Getty Images.

Of course, that's not the only benefit you may qualify for as a spouse. If you didn't earn enough credits to qualify for Social Security benefits on your own, you can collect spousal benefits equal to 50% of what your spouse is entitled to while he or she is alive. And if your spouse passes, you then become eligible for survivor benefits, which means you get 100% of what your spouse was collecting, provided you were married to that person for at least nine months at the time of his or her passing.

But what if you earned money to collect a benefit based on your own work history? If that's the case, then you start by collecting your own benefit and switch over to survivor benefits once your spouse passes if doing so will bump you up to a higher amount. Normally, survivor benefits are automatic, but if you're collecting benefits based on your own record, that switch may not happen as a matter of course. That's exactly what seems to have happened to the 15,000 seniors who aren't getting as much income from Social Security as they should be.

The good news? Now that the Social Security Administration has identified the problem at hand, the agency can take steps to fix it -- namely, by identifying those seniors who aren't collecting as high a benefit as they should, and arranging to move them over to survivor benefits rather than have them continue to collect benefits based on their own work records. But this really underscores the importance of reading up on Social Security and learning as much as possible about how the program works. If you do, you'll be in a better position to be your own advocate and ensure that you don't lose out on money that's rightfully yours.

Furthermore, while it's never a comfortable thing to contemplate the mortality of someone you hold near and dear, it does pay to put an estate plan in place that maps out your various sources of income should your spouse pass away before you. Going through those motions may alert you to income, like survivor benefits, that you otherwise wouldn't think to pursue.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.