Social Security FAQ: Survivor Benefits
Social Security FAQ: Survivor Benefits · Morningstar

“A haunting fear in the minds of many older men is the possibility, and frequently, the probability, that their widow will be in need after their death. The day of large families and of the farm economy, when aged parents were thereby assured comfort in their declining years, has passed for a large proportion of our population. This change has had particularly devastating effect on the sense of security of the aged women of our country.”

With that observation, an advisory council to President Roosevelt and the Congress in 1938 recommended that a survivor’s benefit be added to the Social Security program, and Congress followed suit the following year. Today’s survivor benefit is a modernized version of the original model--it’s gender-neutral these days, for example.

And, along with spousal benefits--which we examined in my last column--survivor benefits are one of the most important features of Social Security. When a spouse dies, the widow or widower often suffers the financial blow of reduced benefits alongside the emotional trauma of grief: The benefit payments to the deceased spouse stop immediately, which means that total income to the household falls.

But in many cases, the blow is softened by the survivor benefit. Here are some of the most frequently asked questions I hear about this feature of the program.

What is a survivor benefit, and how is it different from a spousal benefit?
The survivor benefit is one of the best illustrations of how Social Security really is “social insurance.” Payroll taxes paid into the program buy income protection for your spouse in case of your death--somewhat like life insurance.

When a spouse dies, the survivor is entitled to receive the greater of his or her own benefit or 100% of the spouse’s benefit, including any cost-of-living increases earned along the way. If the higher-earning spouse delays filing until full retirement age (FRA) or beyond, then the surviving spouse’s lifetime benefits will be increased substantially.

Maximizing the survivor benefit is an especially important consideration for women. Men not only tend to be the higher wage earners but also tend to die at younger ages than women. In many cases, this means that a delayed filing by a man can be a critical way to boost lifetime retirement security for older women--a time of life when overall income can decline sharply.

Who can receive a survivor benefit?
Payments can be made to your widow or widower, and/or to a former spouse. But survivor benefits aren’t limited to spouses. In certain situations, surviving unmarried children also can receive survivor benefits, as can dependent parents. Finally, a one-time, lump-sum payment can be made to your spouse or children. The benefit amounts available in these situations vary.