02 Jul

Social Security Survivor Benefits

Three important factors when it comes to your financial life.

Provided by Jeffrey C. Hamm

About 5 million widowed Americans get Social Security survivor benefits. If your spouse has passed, you may be eligible to collect them. This means that you could receive as much as 100% of your late spouse’s Social Security income.1,2

Some widows and widowers aren’t aware of these additional retirement benefits. That’s a shame, because they can provide significant financial help during a period of uncertainty.

You can file for survivor benefits at age 60. In fact, you can claim them as early as age 50 if you are disabled (per Social Security’s definition of disability) and if the condition that left you disabled began before or within seven years of your husband’s or wife’s death. In contrast, you can’t put in a claim for spousal Social Security benefits until age 62.1,3

You have to call Social Security to apply for these benefits. Dial 800-772-1213 to do that (or 800-325-0778 if you are deaf or have trouble hearing). The SSA doesn’t yet permit widows and widowers to apply for survivor benefits online.1

You are actually calling to make an appointment at your local Social Security office, where you can file your survivor benefits application. The SSA says that the process will be faster if you complete its Adult Disability Report beforehand and bring it with you. You can download this form.

Are you eligible to receive all of your late spouse’s Social Security income, or less? That depends on a few factors. You can apply for the survivor benefits at full retirement age (66 or 67), and receive 100% of the monthly Social Security benefit of your late spouse. If you were to apply for survivor benefits somewhere between age 60 and full retirement age, you will receive between 71.5-99% of your late spouse’s monthly benefit.2

If you are disabled and file for survivor benefits in your 50s, then you will be poised to collect 71.5% of your late spouse’s monthly Social Security income.2

Are you caring for a child who is age 15 or younger? If so, you are eligible to collect a survivor benefit equaling 75% of your late spouse’s monthly Social Security income. In fact, that child is also in line to receive a 75% survivor benefit if he or she is a) younger than 18, b) a K-12 student younger than 19, or c) disabled. (In addition, it is also possible for a surviving spouse to collect a one-time $255 death payment if the spouse has already been getting benefits on the deceased worker’s Social Security record or became eligible for benefits upon that worker’s passing.)2,4

In rare cases, even parents of deceased Social Security recipients are eligible for survivor benefits. If a deceased worker has parents who qualify as his or her dependents, those parents may receive survivor benefits if they are age 62 or older. If there is a single surviving parent, he or she can collect an 82.5% survivor benefit; if the late Social Security recipient was caring for two dependent parents, they can each collect a 75% survivor benefit.2

Social Security does cap the benefit amount that a family can receive. A household can’t get survivor benefits exceeding 150-180% of those received by the late Social Security recipient.2

Divorce is no barrier to survivor benefits. Divorced widows and widowers are eligible for them as well.2

What if you marry again? If you have been widowed and marry again after age 60 (or age 50 if you are disabled), you will still qualify for Social Security survivor benefits. If you remarry prior to age 60, however, you can’t receive survivor benefits while married.2

In certain circumstances, you can “switch out” of survivor benefits. If you remarry and your new spouse gets Social Security, you can apply for spousal benefits based on his or her earnings. If the amount of the spousal benefit would be greater than your survivor benefit, you will get benefits equal to the higher amount.2

Also, you can switch from collecting a survivor benefit to your own retirement benefit starting at age 62 (if you are eligible to collect Social Security at that time and your own benefit would be greater than the survivor benefit).2

Could a pension reduce your survivor benefits? Yes, it could. If you worked at a federal, state or local government job at which you didn’t pay Social Security taxes, the Government Pension Offset, or GPO, kicks in (with rare exemptions). Any pension you receive as a byproduct of that job will lower the amount of your survivor benefit by two-thirds of the amount of your pension. As an example, if you get $600 a month from your state government retirement fund, your $500 monthly survivor benefit would thereby be reduced by $400, or cut to $100 a month.5

For more information, contact Jeff Hamm, the NCU Wealth Management Representative located at Navigator Credit Union at 228-474-3427.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations.

 

1 – ssa.gov/survivorplan/onyourown2.htm [2/4/15]

 

2 – ssa.gov/survivorplan/ifyou5.htm [2/3/15]

 

3 – time.com/money/3638427/social-security-survivors-benefits-details/ [12/18/14]

 

4 – ssa.gov/survivorplan/ifyou7.htm [2/4/15]

 

5 – ssa.gov/retire2/gpo.htm [2/4/15]
01 Jul

6 Reasons to Stop Procrastinating and Start Investing

Is anxiety about losing money in a market downturn keeping you from investing? Or maybe you’re waiting for the “right” time to invest — like when you have some extra money. Before you put off investing any longer, consider these six reasons you should invest.

1. Losing money when the markets drop is not the biggest threat to your finances. If you don’t have a substantial nest egg by the time you retire, you run the risk of outliving your money. Inflation poses a long-term threat, too — if your money doesn’t grow to outpace inflation, your buying power falls. It’s far less risky to invest in a well-balanced portfolio than to not invest at all.

2. Your odds of winning the lottery, launching a billion-dollar company or becoming a rock star are slim. As in Aesop’s fable, “The Tortoise and the Hare,” slow and steady wins the race. Building wealth a little at a time over many years may not be as sexy as a sudden windfall or wild success, but it’s a lot more certain. It allows you to control your destiny.

3. You can find a mix of investments that fits your goals, timeline and risk tolerance with the enormous universe of investments available to you. The way you blend investments — your asset allocation — determines the overall level of risk in your portfolio. You can allocate some money to riskier investments with greater potential for growth and some to more conservative investments with less potential for gains, but also less potential for losses.

4. A disciplined approach can help you manage risk — and even use downturns to your advantage. Two strategies can take the emotion out of investing and help keep your portfolio on track toward your goals:

  • Dollar-cost averaging involves investing a set amount at regular intervals, no matter what the market is doing. The result is that you buy more shares when prices are down and fewer shares when prices are up.*
  • Rebalancing means restoring the stock, bond and cash mix in your portfolio to your original target allocations for those asset classes. Over time, as one asset class outperforms the others, your asset allocations will drift away from your targets. To rebalance, you can sell assets from classes that are outperforming the others, buy more of asset classes that are underperforming, or some combination of the two. If your portfolio is not in a tax-sheltered account, be sure to consider the tax consequences of rebalancing.

5. Tax-advantaged accounts can help your money grow faster. To help you save for retirement and college, certain types of accounts come with built-in tax advantages. Accounts that help you save include individual retirement accounts (IRAs); employer-sponsored retirement accounts such as 401(k), 403(b) and 457 plans; Coverdell education savings accounts; and 529 plans.

6. You’ll find the help you need right here.An investment professional from Navigator Credit Union can answer your questions and help you get started. Call for an appointment today at 228-474-3427!

Dollar-cost averaging (systematic investing) cannot guarantee a profit or protect against loss in a declining market. You should consider your ability to continue investing during periods of low price levels.

Investment products:
Not federally insured
Not a deposit of this institution
May lose value