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Have You Ever Thought of Your Social Security as Life Insurance?

A newly widowed client came to my office this month in despair. Her husband Dave had just passed away from an unexpected and sudden heart attack. She, the surviving spouse, was not currently working, opting instead to stay home to raise her son, (age 13) and step-daughter (age 17) who are both in public school.

Understandably she came to me asking for guidance and financial advice. She had no idea how she was going to be able to take over paying the families bills.My answer?: My client and her children can apply for a Social Security survivor payment.

When Dave worked, he paid into Social Security, because his employer deducted a portion of his earnings from every paycheck. Many people see this deduction on their paychecks and think FICA is code for Uncle Sam sticking his hand into their wallet.

In reality, Dave was paying for insurance for his survivors. Social Security calls this protection survivor benefits.

Through this program, spouses and children under the age of 18, and even dependent parents can become eligible to be paid survivor benefits.

Based on their father’s former earnings level, and the number of years worked; Dave accumulated worker credits that Social Security will use to determine how much each of Dave’s surviving family will receive as a monthly benefit. Both his spouse and his children are eligible to receive a monthly benefit from Dave’s Social Security.

Social Security Survivors Benefits Can Be Paid to:

  • A widow or widower—full benefits at full retirement age, or reduced benefits as early as age 60
  •  A disabled widow or widower—as early as age 50
  • A widow or widower of any age who takes care of the deceased’s child who is younger than age 16 or physically challenged, and receiving Social Security benefits
  • Divorced spouses under certain conditions
  • Unmarried children younger than age 18, or up to age 19 if they attend elementary or secondary school full time
  • Dependent parents age 62 or older

Under certain circumstances, benefits can be paid to stepchildren, grandchildren, or adopted children who were disabled before age 22 and remain physically challenged.

Source: 2015 How to Earn Credits Brochure- Social Security Administration

Worker Credits

The Social Security Administration requires up to 10 years of work, to be eligible for survivor benefits, at the family member’s time of death. Anyone born in 1929 or later needs ten years of work (40 credits) to be eligible for retirement benefits. People born before 1929 need fewer years of work. Survivors of very young workers may be eligible if the deceased worker was employed for 1½ years during the three years before his or her death.

When Dave died at age 57, he had only achieved 35 credits on his work record.

Since the number of credits needed for Dave’s case was 40, his family will be unable to apply for fully insured status. However, they will be able to apply for currently insured status through Social Security by using Dave’s credits for one and one-half year’s work (6 credits) in the three years just before his death. 

If the Spouse Is Younger than Full Retirement Age

My client was the same age as her husband – age 57. She has not yet reached full retirement age. Since she is caring for the worker’s (Dave’s) children, she will receive his Social Security benefit as a widow now. If she were not caring for his children, she would still receive a widow’s survivor’s benefit, but it would have been reduced, and would represent a smaller amount of his Social Security benefit. Social Security calculates full retirement ages for survivors based on the year they were born.

In the chart from their website listed below they include an example of 62 survivor benefits based on an estimated monthly benefit of $1,000 at full retirement age. If monthly benefits are applied for prior to full retirement age, the amount is smaller to take into account the lengthier period a person will receive them.

Social Security Administration’s Survivor Benefits Age Chart
Full (survivors) Retirement Age 2. At age 62 3. a $1000 survivors benefit would be reduced to Months between age 60 and full retirement age Monthly % reduction 4.
1939 or earlier 65 $829 60 .475
1940 65 and 2 months $825 62 .460
1941 65 and 4 months $822 64 .445
1942 65 and 6 months $819 66 .432
1943 65 and 8 months $816 68 .419
1944 65 and 10 months $813 70 .407
1945 – 1956 66 $810 72 .396
1957 66 and 2 months $807 74 .385
1958 66 and 4 months $805 76 .375
1959 66 and 6 months $803 78 .365
1960 66 and 8 months $801 80 .356
1961 66 and 10 months $798 82 .348
1962 and later  67 $796 84 .339

Source: Social Security Administration

Children’s Benefits

Unmarried children who are under age 18 (up to age 19 if attending elementary or secondary school full time) are also eligible to receive Social Security benefits when parent dies.

In some cases stepchildren, grandchildren, step grandchildren or adopted children may also be eligible to receive survivor benefits under certain circumstances.

The Social Security Administration Requires Surviving Children to be:

  • Unmarried
  • Younger than age 18
  • 18-19 years old and a full-time student (no higher than grade 12)
  • 18 or older and disabled. (The disability must have started before age 22.)

Within a family, a child may receive up to one-half of the parent’s full retirement or disability benefit, or 75 percent of the deceased parent’s basic Social Security benefit.

The formula used to compute the family maximum in 2015 is similar to that used to calculate the Primary Insurance Amount (PIA).

The family maximum payment is determined as part of every Social Security benefit computation. The formula sums four separate percentages of portions of the worker’s PIA. For 2015 these portions are the first $1,056, the amount between $1,056 and $1,524, the amount between $1,524 and $1,987, and the amount over $1,987.

Determination of family-maximum bend points for 2015
Amounts in formula
Average wage indices
For 1977: 9,779.44
For 2013: 44,888.16
Bend points for 1979
First: $230
Second: $332
Third: $433
Computation of bend points for 2015 First bend point
$230 times 44,888.16 divided by $9,779.44 equals $1,055.71, which rounds to $1,056
Second bend point
$332 times 44,888.16 divided by $9,779.44 equals $1,523.90, which rounds to $1,524
Third bend point
$433 times 44,888.16 divided by $9,779.44 equals $1,987.49, which rounds to $1,987

Source: Social Security Administration


While most employers in the United States deduct Social Security from workers’ paychecks, there are some jobs that still do not. As a result, survivors would be ineligible Social Security survivor benefits. These employers include those who have worked for a railroad for at least ten years, and some employees of state and local governments who opted not to pay into Social Security. In these situations, their employers provided them a retirement pension plan instead of Social Security.


Naturally each survivor’s situation is different. Monthly survivor benefits from Social Security may not be the only payments possible for your surviving family members. Social Security offers a one-time LSDP payment ( Lump Sum Death Payment.) Of course, additional life insurance is recommended. In most cases, Social Secuirty helps but does not adequately cover the income needed when a spouse passes away.

It is prudent to contact a financial advisor to discuss not only your Social Security for retirement, but also explore what options your family would be able to have, in case something happened to you before reaching a full retirement age.

Social Security survivor benefits provide a valuable income for your surviving family members. Knowing how to apply and how to maximize these payments can significantly help family members through a difficult time.

three step review

Image by Pictures of Money via flickr, licensed under CC by 2.0

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Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!