Most of us never see the first 6.2% of our paychecks.
That money goes straight to Social Security taxes.
But who gets your Social Security if you die tomorrow?
What happens to all that money youve paid into the system?
Who Gets Your Social Security When You Die?
First lets address a common misconception: Social Security doesnt set money aside in an account for you.
Your payroll taxes fund the Social Security trust.
Once youre eligible, you receive benefits from the trust.
But the Social Security Administration doesnt have a pot of money with your name on it.
When you die, yourSocial Securitypayments will stop.
If you die before starting benefits, you wont get the money youve paid in.
But withsurvivor benefits, someone else may be able to get Social Security based on your record.
They arent taking your Social Security.
Theyre simply using your work history to qualify for Social Security benefits.
Heres who gets what.
The money youve paid in is simply part of the Social Security trust.
It will be used to pay Social Securitys other obligations.
No Interest Til Almost 2027?
They can claim benefits once they turn 60 (or 50 if theyre disabled).
If they remarry before theyre eligible, they cant get survivor benefits while theyre married.
However, after age 60 (or 50 if theyre disabled), getting remarried wont affect their benefits.
If they get divorced, then theyre eligible.
Or if they waited until age 60 to remarry, theyd be eligible as well.
Important caveat:Your spouse will receive the survivor benefit only if its higher than their own Social Security.
In other words, Social Security will give them the bigger of the two benefits, but not both.
Thats the benefit you qualify for atfull retirement age.
But if you die after starting your Social Security, your spouses benefit is based on your benefit.
Your spouses benefit would be based on that lower amount.
Thats on top of the 75% your current or ex-spouse may receive for caring for your child.
Theyll be eligible only if youre 62 or older when you die.
Are Survivor Benefits Enough?
If you have loved ones who depend on you, life insurance is a must.
One common guideline is to buy enough life insurance to cover 10 times your annual income.
The money youve paid into Social Security may help your loved ones if you die tomorrow.
If you have dependents, survivor benefits alone probably wont be enough.
It might be worth considering life insurance.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].