The Social Security program pays retirement benefits to workers who have paid in to the system over the years through payroll deductions. At age 62, as of publication, you can begin collecting Social Security benefits; if you delay benefits, you can collect a larger monthly amount. If you die while drawing Social Security, your benefits will cease, but your survivors may be entitled to receive benefits based on your work history instead of their own.
Social Security Payments
Although you might have paid a substantial amount into Social Security, the agency does not keep your money in an individual account in the same way as a bank or pension plan keeps a savings account. As long as you remain alive, you continue drawing benefits based on your work record and how much you've earned over your lifetime. Once you die, the benefits cease -- there is no accrued balance that is paid out to your estate or to your survivors. Social Security does not pay benefits for the month of your death.
If you die with an eligible spouse or dependent children, however, Social Security will pay survivors benefits to them. The amount of a survivor's benefit is based on several factors, most importantly the age at which you began drawing Social Security. Full retirement age is based on the year of your birth, and varies from 65 to 67 years of age. If you have waited until full retirement age, then your survivor may be eligible for the same benefit as you were receiving.
Early Retirement and Survivors
If you drew early retirement, then your survivor is eligible for the reduced benefit that Social Security was paying you. To draw 100 percent of your benefit, however, your survivor must be at his or her full retirement age when you die. If your survivor has not reached full retirement age, then Social Security reduces the survivor's benefit.
Social Security makes survivor's benefits available to people as young as 60. The minimum age falls to 50 if the survivor is ruled disabled by Social Security. However, the agency reduces the amount of the benefit for each month remaining until the survivor reaches his or her full retirement age. That amount does not increase as the survivor ages -- it remains the same for the duration of the survivor's life.
Uncollected Social Security
In some cases, workers eligible for Social Security die before collecting any benefits. In this situation, their survivors are also able to collect a full benefit, as long as they wait until full retirement age, and based on whatever the deceased workers' full benefit would have been. The minimum age requirements still apply, and the amount would be reduced for survivors who take the benefit before reaching their full retirement age.
- Roll of dollars image by Mykola Velychko from Fotolia.com