Scenarios about Social Security Survivor's Benefits
Scenario
In addition to providing benefits to former workers, the Social Security program provides benefits to minor children and spouses of former workers. For example, your father died 3 years ago. He was the primary wage-earner for the family. You, your mother, and your 10-year-old brother all now receive survivor benefits from Social Security. You and your brother will each stop receiving benefits once you turn 18 (unless you’re still in high school, in which case you will receive benefits until you graduate, or until you turn 19, whichever comes first). Your mother will stop receiving benefits once your brother turns 16.
Scenario
Widows and widowers may receive Social Security benefits based on the earnings record of their deceased spouses. For example, your 58-year-old grandmother was widowed earlier this year. She can begin receiving reduced survivors benefits when she turns 60, or she can wait until she reaches the full retirement age (66 for her) and receive the full benefit.
Scenario
Spouses and children are not the only relatives who may qualify for survivor benefits; dependent parents may also qualify. For example, your best friend’s parents recently died in a car crash. They were financially supporting your friend’s 80- and 82-year-old paternal grandparents, who lived with them. Your best friend is 20, and does not qualify for survivor benefits. Her grandparents, however, qualify for survivor benefits as dependent parents of deceased workers.
Scenario
Survivor benefits can be an important source of support for the survivors of deceased workers. For example, one of your uncles died 10 years ago, leaving behind a wife and two children under the age of 8. Since that time, your aunt has saved and invested the monthly survivor benefits his two children (your cousins) receive. Because your uncle did not finish college, it was his dream for his children to graduate from college. Now, one of your cousins is graduating from high school and is preparing to start college in the fall. She will be able to pay for a substantial portion of her four years of school with the money saved from her survivor benefits.
Scenario
Current workers pay taxes into the Social Security system, which are then distributed as benefits to current retirees and other beneficiaries. Workers are taxed at a rate of 6.2% of wages, up to $97,500 (in 2007). You can see this from the stub for your first paycheck at your first job. The amount of the paycheck is much smaller than you anticipated. You knew that federal and state taxes would be taken out, but were not expecting nearly 8 percent of your money to be taken out for “FICA†(most for Social Security, plus some for Medicare).