How do social security survivor benefits work?

[00:00:00] Ralph Estep, Jr.: Imagine this. You just lost a loved one, and amidst the grief, you're faced with a mountain of paperwork and some very tough financial decisions. One of those decisions involves social security survivor benefits. But where do you even begin? Are you wondering how to navigate the complex world of social security survivor benefits? Well, don't worry. By the end of this episode, you're going to have a clear roadmap to help guide you through this challenging process. So stay tuned as we unravel this financial puzzle on today's Ask Ralph show.

[00:00:37] Ralph Estep, Jr.: Now, before we dive in, let's take a quick glance at yesterday's show. Yesterday, we tackled a newlyweds tax checklist for those of you who recently tied the knot. If you missed it, don't fret. You can find all our episodes at askralph.com.

[00:00:59] Ralph Estep, Jr.: Now let's turn to today's topic. I received this heartfelt message from Candace in Arizona.

[00:01:05] Candace in Arizona: "Ralph, a friend of mine from church recommended your show, and I've been listening for a few weeks. You asked for questions, and I hope you can help me. I recently lost my husband of 30 years, and I'm overwhelmed with grief and confusion. I've heard about Social Security survivor benefits, but I have no idea how they work or what steps I need to take.

[00:01:27] Candace in Arizona: Can you please help me understand this process? It's hard enough for me to just handle all the day-to-day things since his passing, and these benefits are just something else I have to try to figure out. Thank you for your guidance during this difficult time."

[00:01:42] Ralph Estep, Jr.: I am truly sorry for your loss, Candace. I can't even imagine the grief you feel. And while I can't help you with that grief, I can pray for you. I can help you navigate your social security survivor benefits. So let's talk about this today and let me give you a game plan for moving forward.

[00:01:58] Ralph Estep, Jr.: Welcome to another episode of The Ask Ralph Show, mastering your finances from a Christian perspective. I'm your host, Ralph, and I want to thank you for tuning in today. Whether you're a small business owner, a hardworking individual, or someone simply looking to improve your financial situation, you're in the right place.

[00:02:18] Ralph Estep, Jr.: Before we address Candace's question, let's start with a Bible verse that will help prepare us for today's discussion. Comes to us from the book of Proverbs 19:20. And it says this. "Listen to advice and accept instruction, that you may gain wisdom in the future."

[00:02:35] Ralph Estep, Jr.: Today, we're going to gain some wisdom about social security survivor benefits. So let's dive in.

[00:02:44] Ralph Estep, Jr.: Alright let's tackle your question Candace about social security survivor benefits. I'm sure this is a topic you never wanted to think about. But understanding it can provide immense financial relief during this difficult time you're going through.

[00:02:56] Ralph Estep, Jr.: First off let's answer the basic question. What are social security survivor benefits?

[00:03:03] Ralph Estep, Jr.: In simple terms, these are benefits paid to the surviving spouse and or their children of a deceased person who had enough social security credits during their working years. You could think of it as a financial safety net that the government provides to help families cope with the loss of income when a wage earner passes away.

[00:03:22] Ralph Estep, Jr.: Now let's breakdown how these benefits work and the steps you need to take to claim them. We're going to give you some action items, Candace. First of all, let's talk about eligibility. To be eligible for survivor benefits, the deceased person must have worked long enough to qualify for social security. Now, generally this means they must have earned at least 40 credits, which is about 10 years of work. However, there are some exceptions for younger workers. I'm not going to get into those today. So Candace, the first question to answer is did your husband qualify for benefits? Did he work 10 years paying into the system before he passed? If he did as a surviving spouse, you can join to receive full benefits at your full retirement age or reduced benefits as early as age 60. Now, if you're caring for the deceased child who is under 16 or disabled, you can receive benefits at any age. Children of the deceased can receive benefits if they're unmarried and under 18. Now they give you to 19 if you're still in high school. If the child is disabled and the disability started before age 22, they can receive benefits at any age.

[00:04:24] Ralph Estep, Jr.: Now you didn't share any specifics with me, Candace. So you'll have to consider those items individually. Well, let's discuss the expected benefit amount. The amount of the survivor benefit is based on the earnings of the person who died. Quite frankly, the more they paid into social security, the higher the benefits would be. So Candace, as a spouse, if you're at full retirement age, you can receive a hundred percent of your deceased spouse's basic benefit amount. If you're between 60 and that full retirement age, you'll receive between 71.5% to 99% of the basic amount. Now, if you're caring for a child under 16, you'll receive 75% of the deceased benefit regardless of your age. And each eligible child will also receive 75% of the deceased benefit. So there's a lot of benefits there.

[00:05:11] Ralph Estep, Jr.: Well now let's lay out the steps to take. Here's your roadmap, Candace. So let's get to the practical steps you need to take when claiming these benefits. And I know this can seem daunting, especially when you're grieving. But taking it one step at a time can make it manageable. So let's start with step one. You got to report the death. The first thing you need to do is report the death to the social security administration. Now, in most cases, The funeral home report to death for you. If they didn't, you'll need to call the SSA. I’m going to give you that number right now. It's 1-800-772-1213 or you can visit your local social security office.

[00:05:48] Ralph Estep, Jr.: Let's move on to step number two and that's gather the necessary documents. You'll need to provide several documents when applying for survivor benefits. Let me give you a quick list of these. These typically include proof of death. That's what we call a death certificate. So here's a pro tip. When you're working with a funeral home, make sure to get at least six or more copies of the death certificate. You'll need these for many things. We went through this with my mother-in-law. We're doing a lot of pre-planning for her, and we made sure to tell the funeral home that we're going to need so many copies of that death certificate.

[00:06:20] Ralph Estep, Jr.: The next thing you're going to need is your social security number and the deceased person's social security number. You're also going to need your birth certificate. They're going to ask you for your marriage certificate if you're a surviving spouse. If you've got dependent children, you're going to need the social security numbers and the birth certificates for each of those dependent children. You're also going to need the deceased person's W-2 forms or federal self-employment tax return for the most recent year. And you want to give him that so that it can give you that full balance of those earnings. And finally, you're going to need the name of your bank and your account number for a direct deposit, because you want to get your money.

[00:06:54] Ralph Estep, Jr.: Let's move on to step number three, and that's applying for benefits. Here's the thing I didn't even know about. You cannot apply for survivor benefits online. You can do a lot of things online with social security, but you can't apply for those benefits. So you need to either call the social security administration or make an appointment at your local social security administration office. And during the application process, you'll provide the documents I mentioned earlier and answer those questions about your eligibility. Now I highly recommend you schedule an appointment with them. Candace, it's really the best way to handle it.

[00:07:24] Ralph Estep, Jr.: Let's look at step number four. And this is a crucial step, and that's to decide when to claim. You got to take careful consideration. As I mentioned earlier, you can claim reduced benefits as early as age 60 or you can wait until your full retirement age for full benefits. This decision depends on your individual financial situation. It depends on your other sources of income, and it depends on your personal life expectancy. And this is a time when you might want to schedule a consultation with someone to discuss your options and the impact on your finances as well as your taxes. We haven't even talked about that, but there's an impact there. So you're welcome to schedule a consultation with me. Just go to askralphpodcast.com/store, and I'd be honored to assist you during this difficult time.

[00:08:07] Ralph Estep, Jr.: Let's look at step number five, and I hate to mention this one. And it's called follow-up. After you've applied, make sure to follow up with the social security administration if you haven't heard back within a reasonable timeframe. Don't be afraid to ask questions if anything is unclear. Unfortunately, with some of these governmental entities, you have to keep on top of them to get the benefits you deserve.

[00:08:29] Ralph Estep, Jr.: Now, I want to share a personal experience that might help put this into perspective. And Candace, I know you're going through this. A few years ago my neighbor, Tom, lost his wife, Linda. They've been married for 35 years, and Linda had handled all of their financial affairs. Tom was not only grieving, but also completely lost when it came to managing their money and understanding these benefits. So I sat down with Tom and walked him through the process. Just like I'm doing with you today, Candace. We gathered all the necessary documents. We made the call to social security together, and I even accompanied him to his appointment. It wasn't easy. But taking it step-by-step made it manageable. Now the most important thing I learned from helping Tom was the value of patience and persistence. We can use that in our lives everywhere. There were times when the process seemed overwhelming. Well, we took breaks when needed and celebrated small victories along the way. And you know what. A few months later, Tom told me that understanding and receiving these benefits had given him some financial peace of mind during an incredibly difficult time.

[00:09:33] Ralph Estep, Jr.: So Candace and anyone else out there navigating this process, remember that it's okay to ask for help, reach out to friends, reach out to family, or even a financial advisor if you need assistance. Taking small steps and being patient with yourself can make a big difference. Well now let's talk about some common questions and misconceptions about social security survivor benefits. I hear these routinely and I want to discuss them, so you don't get confused. And what you might read online or what you may hear from family and friends.

[00:10:03] Ralph Estep, Jr.: Number one. "I'm working. Can I still receive survivor benefits?" Yes, you can, but be aware of the earnings limit. If you're under that full retirement age and earn more than a certain amount, your benefits may be reduced. There's also going to be a tax consequence related to collecting these benefits. Number two. "I'm divorced. Am I still eligible for my ex-spouses survivor benefits?" So here's something you might not have expected. If your marriage lasted at least 10 years, you may be eligible for survivor benefits based on your ex-spouse’s record. There's a lot of people who don't know that one. Number three. "I'm already receiving social security retirement benefits. What happens now?" If you're already receiving benefits on your own record, you still should apply for survivor benefits. The SSA will pay you the higher of the two benefits. Not both. So this may be an opportunity to increase your benefits for the rest of your life. So you don't want to miss that one. Number four. We talked about this a little earlier. "Do I have to pay taxes on survivor benefits?" I'm going to say possibly. Like other social security benefits, survivor benefits may be taxable. If your total income exceeds certain thresholds, this is where effective tax planning is critical and something I'm certainly able to help you plan for and understand if you schedule an appointment with me. And number five, I thought this one was kind of humorous. And with this heavy topic today, the question is "can I receive survivor benefits for more than one person?" The answer is no, you can't receive multiple or survivor benefits. If you're eligible for benefits on more than one person's record, you'll get the higher of the two amounts.

[00:11:40] Ralph Estep, Jr.: Remember, these benefits are there to help you during a difficult time. So don't hesitate to claim what you're entitled to. Let's recap what we've covered today. First thing, we defined social security survivor benefits and who's eligible. The second thing we discussed is how the benefit amount is calculated. The third thing we did was we went through to steps to claim these benefits, including reporting the death, gathering those documents, applying and deciding when to claim. The fourth thing we talked about was we addressed some common questions and misconceptions.

[00:12:10] Ralph Estep, Jr.: So, you know what I like to do, I like to give you some actionable steps. So here's some actionable steps. Number one, if you're married, you got to have an open conversation with your spouse about your social security benefits. This is a time to gain knowledge about each other's work history and expected benefit amounts. Number two. Keep important documents organized and in a safe place. This includes birth certificates, marriage certificates, social security cards. In fact, I'm going to be doing a show coming up in the next couple of weeks about what documents you need to keep all the time. Number three. If you're nearing retirement age, consider consulting with a financial advisor to discuss the best time to claim social security benefits. That's where you're going to consider both retirement and potential survivor benefits. I've done a few shows on this topic, so I would encourage you to check them out. You also can schedule a consultation with me and we could discuss this plan together. Number four. Stay informed about any changes to social security laws that might affect your benefits. Number five. And this one hits home, Candace. If you're going through the process of claiming survivor benefits, don't hesitate to ask for help from friends, from family or professionals.

[00:13:19] Ralph Estep, Jr.: If you found this information helpful, I encourage you to visit our website. That's at askralph.com. I want you to join our community and share this episode with others who might benefit from it. Remember when you join our email list, you'll get a free copy of my book. Mastering your finances. It's a $10 value on Amazon, but it's yours absolutely free when you sign up. So go do that now. Now tomorrow we'll be tackling another important financial question. And that's this one. Should I refinance my auto loan and Ralph, how do I even do it? Well, tune in to learn how you could potentially save money on your car payments. I might just have some advice to save you some serious cash.

[00:13:56] Ralph Estep, Jr.: As we wrap up today's episode, I want to remind you all to keep sending in your questions. The whole point of Ask Ralph is to answer your burning financial questions from a Christian perspective. Your questions truly drive the show and I'm here to help you navigate your financial journey. My passion is to help you and show you how to attain financial success and live out your dreams. So, if you have a question like Candace had, you can email me at ralph@askralph.com. or you can visit our website like I mentioned askralph.com and click on the microphone icon, and you can record your message. I would be honored to answer your question. So why not reach out today?

[00:14:35] Ralph Estep, Jr.: Let me close with this. Remember, dealing with finances after losing a loved one can be overwhelming. But you're not alone. Lean on your faith, seek support from your community, and don't be afraid to ask for help when you need it. Candace, I hope you feel a little more secure today, armed with the knowledge of how to navigate this new season of your life. Well, thank you for listening to The Ask Ralph Show.

[00:14:58] Ralph Estep, Jr.: As I always say, stay financially savvy, and God bless you.