Social Security is a huge program, with almost 59 million Americans getting more than $70 billion in monthly benefits from the Social Security Administration. Almost three-quarters of these benefits go directly to retired workers, but the Social Security program also provides key assistance to retirees' loved ones after they pass away. Specifically, more than 6.1 million Americans receive survivor benefits from Social Security, with nearly all of them being surviving spouses or children of deceased workers.
In total, recipients of survivor benefits get about $6.68 billion in monthly Social Security payments. That represents an average of $1,088 per month for every surviving family member getting Social Security benefits. Yet when you look more closely at the numbers, you'll find that many survivors have to live on even smaller benefits, while others take greater advantage of how Social Security works to boost their payments.
To show you where you stand compared to others in your situation, let's turn to the SSA itself to find out how much the average American gets in survivor benefits from Social Security. Even if you're not in a situation in which you're collecting survivor benefits now, what you learn could help you take steps to make sure you'll get as much as possible if you find yourself in that position in the future.
What the typical survivor gets
After your death, your spouse can receive survivor benefits from Social Security under several different provisions. The most common occurs when your spouse is at or near retirement age, with surviving spouses being entitled to claim benefits as early as age 60. As you'll see below, those benefits are substantial, with the typical nondisabled surviving spouse receiving $1,253 in monthly payments.
By contrast, average benefits for surviving family members who haven't yet reached retirement age tend to be smaller. Spouses under 60 who care for children under age 16 are also entitled to Social Security benefits, but they tend to be smaller, with the average coming in at $924 per month. Disabled spouses can claim survivor benefits as early as age 50, but they average even less at just $712 monthly.
Children also tend to receive relatively small amounts in survivor benefits. Children under age 18 can receive survivor benefits, as can those who are 18 or 19 and still in high school as well as children of any age who became disabled before reaching age 22. On average, eligible children get about $816 in monthly Social Security benefits.
Why benefits differ
One of the biggest reasons why these average benefits are different is that the rules that determine how much each person gets in survivor benefits differ among various family members. For instance, here are some of the most common classes of survivors and how much they receive as a percentage of the deceased worker's primary insurance amount:
- Spouses who reach full retirement age before claiming can get 100% of the worker's benefit.
- Spouses who claim between 60 and full retirement age get between 71.5% and 99% of the worker's benefit.
- Disabled spouses who claim between 50 and 59 get 71.5% of the worker's benefit.
- Spouses caring for children under 16 get 75%, as do eligible children.
As you can see, it therefore makes sense that children and disabled spouses would get considerably less than spouses who reach full retirement age, as the percentage amount that the SSA applies to the deceased worker's benefit is smaller.
Giving your surviving loved ones more from Social Security
Yet the other determining factor in how much family members get in survivor benefits is what decision the worker makes in choosing when to take Social Security. If the worker claimed benefits early, that reduces not only the worker's own benefit amount but also the amount on which the SSA calculates survivor benefits. That will leave your surviving spouse and any eligible children potentially receiving less in benefits for as long as they're allowed to receive them.
Unfortunately, most people end up costing their survivors some of their benefits. When you look at trends on the age at which men claim Social Security over the past 50 years, you'll see that men don't wait nearly as long to collect benefits as they used to. Now, only about 20% of all men wait until full retirement age or beyond. Nearly half claim at the earliest possible age of 62. That decision has the impact of reducing survivor benefits for their loved ones by 25%.
By contrast, those who wait until past full retirement age can actually enhance their survivor benefits, but only about 6% actually do so. And while men demographically are more likely to be the first to die, the claiming trends among women are quite similar.
If you want to make sure your loved ones won't end up on the short end of the stick after your death, be sure to think twice about when to start taking Social Security benefits. Even if you don't end up maximizing your own benefits with your decision, the extra amount that your loved ones get in survivor benefits could make a vital difference in their financial survival after you're gone.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.