Social security is our Federal government system that pays you a percentage of your pre-retirement income every month after a certain age. This amount is based on your lifetime earnings and varies depending on when you choose to start receiving benefits. There are other ways to receive benefits also. These include disability or if your spouse passes away and you choose to receive benefits based on his or her lifetime income. No matter why you receive benefits from Social Security, they can be part of your overall plan for your estate. Let’s look at the types of Social Security benefits you can use during retirement, including using an advanced designation, POAs, and retirement or survivor benefits.

Retirement Benefits

You can start receiving your Social Security retirement benefits as early as age 62 if you have enough work credits recorded with Social Security. However, if you receive your benefits at age 62, you only get 70% of the amount of your full benefits per month. If you wait to receive benefits until after your full retirement age, you are entitled to full benefits. 67 years old is full retirement age if you were born after 1960.

If you delay taking your benefits from your full retirement age up until you are age 70, your benefit amount will increase even more. At age 70, you could receive 132% of the monthly benefit because you delayed getting benefits for 48 months.

If you are curious about the estimated amount of Social Security benefit for a certain age based on your work record so far, check out the Social Security Benefit Calculator.

Spousal Retirement Benefits

If you did not work a job but were married more than a year to someone who did (if divorced, then married 10 years), then you are entitled to their retirement benefits at age 62. 

At 62 years of age you only receive 32.5% of the total benefit amount every month. If you wait until full retirement age which is 66 or 67 years old depending on when you were born, you receive the full spousal retirement benefit which is 50% of your spouse’s benefit amount.

Survivor Benefits

You may have a terminal diagnosis or feel concerned about the future of your family when you die. Social Security can be part of your plan for your family. Depending on how long you worked and how much you made, your family can receive benefits monthly. These benefits are a type of inheritance that you can pass on because you worked hard during your lifetime.

Types of Family Benefits:

• Spouses age 62 or older. At 62, you would receive 32.5% of your spouse’s retirement benefit amount. At age 67, you would receive a full 50%.
• Spouses less than 62, taking care of child entitled to benefits less than 16 or disabled.
• Children up to age 18, or up to 19 (if full-time students not graduated from high school).
• Disabled children, including age 18 or older, if they were disabled before age 22.
• Adopted children may also receive benefits
• Former spouses, if they are age 62 or older and were married 10 years or longer to you. Full 50% benefit starts at age 67.

Disability Benefits

If you have worked long enough, you may qualify for Social Security disability payments each month if you have a medical condition that keeps you from working for at least a year or if you have a terminal diagnosis. You can apply for disability and find out more about how much you would receive each month through the Social Security Disability Online Application Process.

Advanced Designation

If you receive benefits of any kind from Social Security and you are an adult, you can designate someone (or up to three people) you trust. These individuals are your “Representative Payee” should you become incapacitated. This allows you to choose someone you trust to use your benefits properly to care for you. You can set this up when you first file a claim for Social Security. You can also file online or by phone. For more information, check out the FAQ.

The advanced designation is provided for in the “Strengthening Protections for Social Security Beneficiaries Act of 2018”. 

Estate Planning For Social Security Benefits

It is important in Estate Planning to set up a Medical Power of Attorney and a Durable Power of Attorney. These legal documents designate someone to care for your financial and healthcare decisions as you age. However, Social Security does not recognize a Power of Attorney document as defining the individual who can decide your advanced designation for you. 

Because Social Security does not recognize the power of attorney, it is important to go ahead and make your advanced designation clear. Let Social Security know so that there is no confusion about who should be your personal representative payee if you become incapacitated.

Seek Help

If you need to make an estate plan, consider all of your income and how best to plan for the unexpected. Meeting with an attorney specializing in estate planning can help you think about the best way to use your retirement benefits to plan for your future and that of your heirs. Planning now can make all the difference for you and your family later on.

• https://www.ssa.gov/pubs/EN-05-10035.pdf  
• https://www.ssa.gov/benefits/retirement/planner/1960.html  
• https://faq.ssa.gov/en-us/Topic/article/KA-10039