Can Social Security Benefits Be Saved for College
Social Security benefits tin can serve as an additional income stream for retirement, but they can also exist paid out under other circumstances. For instance, Social Security survivor benefits can be paid to the widows, widowers and dependents of eligible workers who have died. So if you're married and take young children, for example, you may exist able to receive survivor benefits if your spouse passes away unexpectedly, even if retirement is still decades off. While Social Security survivor benefits are non a substitute for cash savings or life insurance, they tin can provide some financial relief to loved ones who are left behind.
Social Security Survivor Benefits, Explained
Social Security survivor benefits are paid to eligible family members of workers who take passed abroad. That can include a spouse, child or even a parent. Benefits are received as a monthly payment, the same way regular Social Security retirement benefits or disability benefits are paid.
Survivor benefits can exist used to cover day-to-day living expenses that would otherwise have been covered by the deceased person's income. So going back to the example of a widow with two young children, survivor benefits could be used to pay for housing, utilities, food and other bones expenses.
Bottom line, Social Security survivor benefits can help ease financial strains created by the loss of a breadwinner. While the benefit amount that's received may non fully supervene upon lost income, survivors tin count on having some coin coming in on a regular basis.
How Social Security Survivor Benefits Work
If someone is working and paying into the Social Security system through payroll deductions, some of what he pays goes to fund survivor benefits. Once again, survivors include parents, spouses and children. When a worker passes away, his survivors tin can file for survivor benefits with the Social Security Administration. The amount of survivor benefits they tin receive is based on the deceased worker's earnings over the grade of his working history. And so the more someone pays into Social Security during their lifetime, the more benefits their survivors could receive.
The monthly benefit itself represents a pct of what the deceased worker would accept received in Social Security benefits, based on their total retirement age. Additionally, in that location are some guidelines based on the historic period and relationship of the person who'due south receiving survivor benefits.
Here'southward a wait at some different scenarios in which Social Security survivor benefits may be paid out and what a survivor could receive:
- Children under xviii (or ten if they're nevertheless in school) and children who are disabled tin can receive a 75% survivor's do good
- A dependent parent anile 62 or older could receive a survivor's do good equivalent to 82.5% of the deceased worker's benefit
- When there are two surviving parents, they'd each receive a survivor's benefit representing 75% of the regular do good
- Widows or widowers or any age caring for a child under historic period 16 are eligible to receive 75% of regular benefits
- Disabled widows or widowers aged 50 to 59 can receive 71.5% of benefits
- A widow or widower who's age 60 to full retirement age tin can receive 71.v% to 99% of their spouse'southward Social Security benefit
- Widows and widowers who are at their full retirement age or older can receive 100% of the benefit corporeality
It's worth noting that divorced survivors can still receive benefits. The percent amounts would be the same every bit listed to a higher place for widows and widowers.
Social Security Survivor Benefit Rules
There are some specific guidelines to exist aware of that apply when collecting survivor benefits. Start, yous should know that you can't receive Social Security survivor benefits on top of your ain retirement benefit if yous're budgeted retirement or already retired. The Social Security Administration will only pay out the college of the 2 benefit amounts so there's no double-dipping.
Next, there are limits on how much survivors can earn while receiving benefits. If y'all're under full retirement age your benefit corporeality could be reduced, based on what y'all earn. For 2020, the Social Security Administration reduces survivor benefits by $1 for every $two you earn to a higher place $18,240. In the year you reach total retirement age, the deduction changes to $1 for every $3 earned above $48,600.
If you're a widow, widower or surviving divorced spouse, then remarrying could also touch on your benefits. If you get married again earlier age 60 (or 50 if you're disabled) then yous tin can't receive Social Security survivor benefits while y'all're married. If y'all get married after age lx (or age 50 if disabled) and so you could all the same authorize for benefits based on your deceased spouse'due south Social Security tape.
How to Apply for Social Security Survivor Benefits
When a loved 1 passes away there are certain steps you must take to employ for Social Security survivor benefits. The first is reporting their death to the Social Security Administration, which the funeral home may exercise for you. Y'all tin can also phone call yourself to report the death and begin the awarding process. The number for that is 1-800-772-1213. If you want to employ in person you should contact your local Social Security function kickoff to brand sure information technology's open for in-person appointments.
You'll need sure documents to utilize and what you need depends on your status. So for instance, the list may include:
- Proof of death (i.e. a death document)
- Birth certificate or other proof of birth (for yourself and/or children if you're applying for widow(er) benefits)
- Proof of citizenship
- Due west-ii forms or taxation returns
- A final divorce decree if applying as a surviving divorced spouse
- Spousal relationship document
For some documents, such every bit a birth certificate, merely official original records are accepted. For others, such as taxation returns, you lot tin can substitute photocopies.
Even if yous don't have all of your documents ready, the Social Security Assistants encourages you to apply for survivor benefits sooner rather than later. Delaying your application could mean waiting that much longer to first receiving benefits.
Yous should also exist prepared to answer questions about your relationship to the deceased person, their work and earnings history, military service and whether you expect to receive any alimony benefits as a consequence of the worker'due south decease. All of this information is used to make up one's mind whether you're eligible to receive survivor benefits and in what amount.
The Bottom Line
Social Security survivor benefits can be an important part of your financial plan if your spouse passes away or you die, leaving a family behind. While they may non completely replace lost income, they can brand a difficult fourth dimension somewhat easier to navigate.
Tips for Investing
- Consider talking to your financial advisor near your Social Security benefits strategy. If y'all don't have a financial counselor yet, finding ane doesn't have to exist complicated. SmartAsset'south financial counselor matching tool can assist y'all connect with a professional advisor in your local expanse. Information technology takes just a few minutes to go your personalized recommendations online. If y'all're ready, get started now.
- Life insurance tin provide fiscal peace of mind to your loved ones if yous laissez passer away. Permanent life insurance policies tin can too offering an investment component to help you build cash value during your lifetime. Post-obit a few basic principles can help you know how much insurance you lot may need.
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Source: https://smartasset.com/financial-advisor/social-security-survivor-benefits
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