What happens to a deceased persons social security benefits or money?
Tuesday, May 18th, 2010 at
6:27 pm
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Filed under: Retirement Planning
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When you collect SS, you are not getting back money you deposited over the years as you would in a self-directed retirement plan. You are getting monthly payments based on the number of years you contributed into the system, and the money you are paid is coming from younger people who are still working and paying into the system. If you were to try and set up the same arrangement in the private sector, you would be jailed for running an illegal Ponzi scheme. But I digress…
When you die, your benefits cease immediately. There are some special arrangements for surviving spouses and a measly 250-ish death benefit. So the rest of the money stays in they system and is used to pay someone else.
Many people, though, end up taking far more out of SS than they ever put in. So it isn’t a rip-off in that respect.
gets stopped by SS,and that’s it.
It is not "your dad’s" or "your mom’s" money. There are no accounts with their names on it like an IRA. You qualify for SS benefits by paying taxes into it during your working career.
When a spouse dies, the surviving spouse can collect a "surviving spouse" SS benefit if he/she is not collecting Social Security in his/her own name. But you don’t get to collect both.