wife, Larissa, gives birth to a daughter, Janniva. Johnny plugs away at the law firm for six more years and then retires at 66, claiming a Social Security retirement benefit of $2,466. Janniva qualifies for a child benefit of $1,233 (half of her father’s full retirement benefit), and she gets that benefit as a dependent child until she turns 18. If Johnny dies at age 66, Larissa can also get a benefit, even though she’s only 36 years old. As a young surviving spouse who is caring for the deceased worker’s dependent child, she gets a monthly payment of $1,850. The SSA applies different time limits to some of the family benefits that involve children. In the preceding example, the money Larissa gets as Janniva’s mother ends when her daughter turns 16.
THE GOVERNMENT PENSION OFFSET PROVISION
Say you qualify for spousal or survivor’s benefits in Social Security, but you also get a pension because of your own work in local, state, or federal government. If so, your Social Security may be reduced under the Government Pension Offset provision. The reduction is significant: It comes to two-thirds of the amount of your government pension. Suppose you have a government pension of $900 per month, and you’re eligible for a Social Security widow’s benefit of $1,200 per month. In this case, Social Security may reduce your widow’s benefit by $600 (two-thirds of $900), leaving you with a Social Security benefit of $1,200 – $600 = $600.
Congress enacted the Government Pension Offset provision to make sure that Social Security benefits for government workers are reduced in a similar manner as for individuals who have worked entirely within the Social Security system. For example, if you qualify for a Social Security spousal or survivor’s benefit, but your own work record makes you eligible for an even larger benefit, you get only the benefit you’ve earned yourself. You can’t receive both your larger benefit and the smaller spousal or survivor’s benefit. In practice, several factors can preserve your full Social Security benefit, such as the following:
Your government pension isn’t based on your earnings.
Your government pension is based on a job in which you paid Social Security taxes and you filed for Social Security benefits before April 1, 2004, or your job ended before July 1, 2004, or you paid Social Security taxes on your earnings during the last five years of government work.
You’re a federal employee who switched from civil service retirement to the Federal Employees Retirement System (FERS) after December 31, 1987, and you filed for Social Security spousal or widow/widower benefits before April 1, 2004; your job ended before July 1, 2004; or you paid Social Security taxes on five years of earnings for government employment between January 1988 and when you become entitled to benefits.
You can find out more about the Government Pension Offset provision at www.ssa.gov/pubs/10007.html.
Surviving the Loss of a Breadwinner
Social Security isn’t just about retirement — it also protects Americans when a family breadwinner dies. You can think of these protections as life insurance that helps families carry on when their livelihood has been shattered. Social Security pays benefits to almost 2 million children whose parents have died. Survivor benefits also go to more than 4 million widows, widowers, and elderly parents who had depended on the deceased worker for financial support.
Benefits may be higher for survivors than for those who depend on a living retiree. In cases of multiple beneficiaries, the family maximum may kick in, limiting payments to about 150 percent to 180 percent of the late worker’s primary insurance amount (see the nearby sidebar “Social Security’s benchmark for benefits: The primary insurance amount”). When that happens, benefits going to dependents are reduced proportionately.
In this section, I fill you in on who qualifies for survivor benefits and how the breadwinner may earn those benefits before he or she dies.
SOCIAL SECURITY’S BENCHMARK FOR BENEFITS: THE PRIMARY INSURANCE AMOUNT
The primary insurance amount (PIA) is a dollar figure that becomes the basis for benefits that go to you and your family members. The PIA is what you get if you begin collecting Social Security at your full retirement age (currently 66 and 2 months, and gradually increasing to 67 for workers born in 1960 or later). To determine your PIA, the SSA looks at your past earnings and adjusts them upward to reflect today’s wage levels. The SSA then goes through a series of mathematical steps and arrives at your PIA.
For an average wage earner, a PIA is around $1,820 per month (as of 2019), although it can be significantly more for high wage earners. You can get a rough idea of your PIA — and get an idea of other potential benefits — by using Social Security’s online tools and projecting benefits at your full retirement age: Check out the Social Security Quick Calculator (www.ssa.gov/oact/quickcalc) and the Retirement Estimator (www.ssa.gov/estimator).
Your actual Social Security benefits may be lower or higher than the PIA for various reasons, but they will be based on it. Here are some examples of benefits and their link to the PIA:
Retired worker: You get 100 percent of your PIA if you retire at the full retirement age. You can start collecting as early as age 62, but the amount you receive per month is reduced if you collect before the full retirement age and increased if you delay collecting until after the full retirement age (up to age 70).
Disabled worker: You get 100 percent of your PIA. The benefit isn’t reduced for age and automatically switches to a retirement benefit when you reach full retirement age.
Spouse of retiree or disabled worker: You get up to 50 percent of the covered worker’s PIA. You can start collecting at age 62, but the amount you receive is reduced if you collect before reaching full retirement age.
Spouse with child: You get 50 percent of the covered worker’s PIA if the child is under 16 or disabled. You may be any age, and the benefit isn’t reduced if you collect before you reach full retirement age.
Divorced spouse: You get up to 50 percent of the covered worker’s PIA. You can start collecting at 62, but the amount you receive is reduced if you collect before reaching full retirement age. A couple of other rules: Your marriage must have lasted at least ten years, and you must be unmarried.
Widow/widower age 60-plus or divorced widow/widower age 60-plus: You get up to 100 percent or more of the covered worker’s PIA, but the amount depends on several factors. It’s reduced if you collect before reaching full retirement age, and it’s increased if the deceased spouse had built up delayed retirement credits. The amount you receive per month can’t exceed what the deceased spouse was collecting.
Widow/widower (at any age), caring for a child under 16: You
