Social Security is typically thought of as a supplemental retirement income stream. It can be much more than that in times of critical need. A family facing challenges such as death of a spouse, disability, divorce, or dependent children/parents, should be aware of the benefits to which they are entitled too to help them alleviate the financial pressure they may be under.
So how exactly do family benefits work? Generally speaking you will receive either a percentage of the Social Security benefit, the entire amount of the Social Security benefit, or a family maximum. To help illustrate the difference let’s run through some questions and answers for each situation.
Question: Can my spouse collect Social Security based on my work record?
Answer: Yes. Spousal benefits are available to a couple who has been married for one year or longer. The maximum they can collect is 50 percent of working spouses Primary Insurance Amount otherwise known as Full Retirement Age if they wait until their own Full Retirement Age or they may collect a further reduced amount starting at age 62. 1
Question: Can my ex-spouse collect Social Security based on my work record?
Answer: Yes. If you were married to your ex-spouse for 10 years or longer and are currently not married the same benefits apply to you as they do a current spouse. 1
Question: What benefits are available to my family in the event that I pass away?
Answer: There are two parts to consider. Yes. Your unmarried dependent children under the age of 18, or 19 if attending a primary or secondary school, or disabled as long as disability occurred before the age of 22, are entitled to receive 75 percent of their deceased parent’s PIA up to a family maximum amount. If you are caring for a child under the age of 16 the spouse is entitled to also receive 75 percent of the PIA up to a family maximum. In this situation Social Security has become available immediately to the family to provide additional income. Secondly, a widower can access their deceased spouse’s Social Security benefit at age 60. This is two years earlier than the traditional spousal benefit. As with any situation of taking Social Security early, it will be subject to a percentage reduction of the full benefit. 1
Question: Are my dependent children eligible for Social Security based on my work record?
Answer: Yes. The same eligibility rules apply as if you were deceased. The only change is that your children would only be able to collect 50 percent of your PIA. 1
Question: Is anyone else able to collect benefits off of my record?
Answer: Yes. Your dependent parents may collect off your record presuming that you are deceased and that you were providing for more than 50 percent of their support prior to passing away. This is the least common family benefit that is available. 1
It is important to remember that a family member collecting a Social Security benefit off of your record will not reduce the benefit you are entitled to receive. Applying for the benefits you and your family are entitled to receive can add up to significant income for your family and help to relieve the pressure a life changing event may have on your resources.
Everyone’s situation is unique. Couple that with the complicated intricacies of Social Security benefits and it quickly becomes apparent that your financial advisor will be critical in helping you determine when and how to apply for your benefits.
Nationwide Retirement Institute. Social Security – The Choice of a Lifetime.
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