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Once you begin Social Security retirement benefits, you are typically assured to obtain month-to-month checks for life.
But that can cease once you die — with some exceptions for your loved ones.
A one-time lump-sum death payment of $255 may be out there, supplied your survivors meet sure necessities.
For instance, a surviving partner may be eligible for the demise payment in the event that they had been dwelling with the one who passes away. If the partner was dwelling aside from the deceased, however was receiving Social Security advantages based mostly on their file, they may additionally be eligible for the $255 sum.
If there isn’t any surviving partner, youngsters of the deceased may as a substitute be eligible for the payment, as long as they qualify to obtain advantages on their deceased guardian’s file when they died.
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The Social Security Administration ought to be notified as quickly as attainable when a beneficiary dies to cancel their advantages. Funeral properties typically report a demise to the company. But it might be clever for survivors to additionally report it, in accordance to Jim Blair, vp of Premier Social Security Consulting and a former Social Security administrator.
Other profit funds may want to be returned
Though a one-time demise payment may be out there, any profit funds obtained by the deceased within the month of demise or after should be returned, in accordance to the Social Security Administration.
However, how this rule is dealt with depends upon the timing of the demise.
Social Security checks are paid for the advantages earned the month earlier than. The schedule of the month-to-month Social Security funds depends upon a beneficiary’s date of beginning, and largely fall on both the second, third or fourth Wednesday.
If somebody receives their month-to-month Social Security payment after which dies, the Social Security Administration may not take the cash again, in accordance to Blair.
But if as a substitute the beneficiary dies after which receives their month-to-month Social Security verify, it may have to be paid again, he mentioned.
The Social Security Administration cautions towards cashing any checks or retaining direct deposits obtained within the month of demise or later.
If a deceased beneficiary was due a Social Security verify or a Medicare premium refund when they died, a claim may be submitted to the Social Security Administration.
Plan forward for survivor advantages
But monetary planning mustn’t cease there.
“People want to take note of how vital Social Security is of their property planning,” Blair mentioned.
For instance, if you declare retirement advantages at age 62, your advantages are decreased, and so are the survivor advantages that develop into out there when you die, Blair mentioned. If you wait to declare advantages till age 70, the utmost age till which you can delay month-to-month Social Security retirement checks and see your advantages enhance, the survivor profit can be elevated.
What’s extra, that added earnings may assist you protect different belongings that you can depart behind.
“Your different wealth you can cross on to your partner and different youngsters and your loved ones,” mentioned Bruce Tannahill, a director of property and enterprise planning with MassMutual.
‘One of essentially the most steadily missed advantages’
Certain members of the family may be eligible to obtain survivor advantages based mostly on the deceased beneficiary’s earnings file beginning as quickly because the month they died, in accordance to the Social Security Administration.
That may embody a surviving partner age 60 or older.
When each spouses have claimed Social Security advantages and one dies, the rule of thumb is the bigger profit continues and the smaller profit goes away, in accordance to Joe Elsasser, a licensed monetary planner and president of Covisum, a Social Security software program claiming firm.
But there can be pitfalls, significantly for {couples} who’ve been collectively for years however by no means married, he famous.
Some states will deal with these unions as frequent legislation marriages, that are acknowledged by the Social Security Administration. However, different states may haven’t any such preparations, which suggests survivor advantages wouldn’t be out there to the dwelling companion ought to their important different die.
In many instances, Elsasser mentioned he would advocate these {couples} get married, significantly when one member of a couple has a very excessive Social Security profit and the opposite does not.
Of course, marriage doesn’t at all times make sense financially for all {couples}, he mentioned.
Another pitfall may emerge for youthful widows or widowers who remarry by age 59, for instance.
“That might be a very dangerous factor, as a result of it may well stop you from accessing the widow profit underneath your ex,” Elsasser mentioned.
If as a substitute somebody remarries after age 60, they’re nonetheless entitled to a survivor profit from a deceased partner, in accordance to Blair.
Others who may be eligible for advantages on a deceased beneficiary’s file embody:
- A surviving partner 50 or older who has a incapacity
- A surviving divorced partner in the event that they meet sure {qualifications}
- A surviving partner who’s caring for a deceased’s youngster underneath age 16 or who has a incapacity
- An single youngster of the deceased who’s underneath 18, or up to 19 if they’re a full-time elementary or secondary college pupil, or age 18 and older with a incapacity that started earlier than age 22.
“Divorced widow advantages are literally some of the steadily missed advantages by folks as a result of they do not know they’re out there,” Elsasser mentioned.
For instance, if you’re 70 and had been divorced 20 years in the past, you may not know that your ex has died, nor suppose to verify with the Social Security Administration to see if their profit would be larger than yours, he mentioned.
Importantly, the Social Security Administration is not going to notify you these advantages can be found, Elsasser mentioned.
Note the household most, and different ideas for survivors
In sure circumstances, different members of the family may be eligible for survivor advantages, together with adopted youngsters, stepchildren, grandchildren or step-grandchildren.
Parents age 62 or older may additionally be eligible for advantages in the event that they had been a dependent of the deceased for no less than half of their assist.
A household most limits how a lot can be collected when there are a number of members of the family claiming on one file, similar to a surviving mom and three youngsters, in accordance to Elsasser. However, this hardly ever impacts retirees, as a result of exes don’t depend as a part of a household most, he famous.
Additionally, in some instances an earnings check threshold may offset the quantity of advantages you obtain if you even have earned earnings.
Here are some vital ideas for survivors to bear in mind:
- Claimants may need to file a restricted utility. It is feasible to declare a widow’s profit whereas letting your personal retirement profit develop, or vice versa, in accordance to Elsasser. For instance, you may declare a widow’s profit at 60, after which swap to your personal retirement profit at age 70.
- Social Security can present a “profit matrix” evaluating profit choices. The doc may present you how your month-to-month profit and your survivor advantages examine. “We at all times inform of us, in the event that they’re trying to decide the very best plan of action between their very own profit and or a surviving partner profit, contact SSA and get the profit matrix report that can give you the data you want to make a resolution,” mentioned Marc Kiner, president of Premier Social Security Consulting.
- Social Security is not going to inform you what technique will give you most lifetime advantages. While Social Security personnel may inform you how to get the best profit on the day you go to an workplace or name, they won’t essentially inform you how to get the utmost advantages over your lifetime, Elsasser mentioned. Consequently, it’s best to search extra customized outdoors recommendation to establish the very best technique for your scenario.
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