Losing a spouse is life-changing, and the grieving process can be made even more difficult when faced with financial challenges. After the initial process of sorting through your money and covering funeral costs, you still have to find a way to provide for yourself in your new life, which can be especially difficult if your partner was the primary breadwinner.
For those who are eligible, widow’s benefits (a.k.a., survivor’s benefits) can provide much-needed support during this difficult time. But the process of receiving benefits can seem confusing and overwhelming – what’s the process, and how do you go about collecting your owed funds? How do you qualify for widow’s benefits? What if your spouse was retired upon their passing, or has just received a terminal diagnosis?
Quick side note: One excellent book I recommend reading is “Preparing to ‘Go It Alone,’” by Ruth Delaney. It has a lot of helpful information about things to do before and after your spouse passes away.
So many factors come into play when collecting widow’s benefits, and it can be overwhelming. Today, we’re walking you through what widow’s benefits are, as well as how you can collect them.
How do you qualify for widow’s benefits, and how do you collect them?
Survivor’s benefits can come from a variety of sources, including Social Security, military compensation and pension plans. The eligibility criteria and amount of benefits vary depending on the specific program and the circumstances of the spouse’s death.
Spousal Retirement Benefits
Spousal retirement can come in many forms, including 401(k), 403(b) annuities and 457 plans – but they most commonly come from pension plans.
Investopedia defines a pension as “an employee benefit that commits the employer to make regular contributions to a pool of money that is set aside in order to fund payments made to eligible employees after they retire.” Usually, pensions are provided through government-run sectors, but there are also a few private-sector pension providers.
Since pension providers vary by job and region, there isn’t a hard-and-fast set of requirements. However, to be eligible for a widow’s pension, the following conditions typically must be met:
- Your partner must have been eligible and participated in a pension plan
- Spouses are named as beneficiaries and election was made for survivor benefits at retirement. If the participant was not retired, then you may be able to set up lifetime payments in a defined benefit plan. Today, most retirement plans are a defined contribution plan and you can rollover the plan into an IRA in your own name if your spouse was older
- You were still married at the time of death
- You must meet the age requirements set by the pension plan, which can vary
- Your spouse must have made sufficient contributions to the pension plan during their lifetime. Spouses must sign if a participant in a pension plan did not elect a survivor benefit.
To submit a claim for a widow’s pension, you’ll likely need to fill out forms through the pension provider – assuming the pension disbursement has not started already. Once approved, you’ll typically receive the pension through monthly payments.
Social Security benefits
Social Security (SS) benefits are financial benefits provided by the government to widows or widowers after the death of their spouse. These benefits are designed to provide financial support to individuals who have lost their primary source of income due to the death of their partner.
For example, you may receive a one-time $255 payment from the SS administration for burial costs if you were living with your spouse at the time of death.
The full amount you’ll receive depends on the age of your spouse at the time of death, as well as if you/they were at full retirement age or not. Those under the age of 60 and with limited income may also be able to receive benefits early.
If you’re already receiving SS benefits, you will likely lose the amount of the spouse with the lowest payment, whether that be you or your deceased spouse. For example, if your husband’s SS benefit was higher, you will receive his rather than your own.
There is the potential for several complicating factors regarding SS when a spouse passes, so it is important that you report their death swiftly and ensure the news has registered with the SS office. The worst thing is when they finally realize they’ve been paying benefits to a deceased person and come looking for money that you thought was yours to spend. We recommend working with a financial professional to make sure everything is sorted out properly.
To find out if you qualify and to collect your benefits, you should contact the SSA to fill out a benefits claim form.
The military provides a monthly annuity to the family of military members, whether they are on duty or after retirement.
The amount depends on several factors: what the military member opted for in their retirement plan, service level and duration of service. In general, spouses can expect to receive up to 55 percent of a service member’s retired pay. However, if you remarry before the age of 55, you will no longer be eligible to receive benefits.
Thanks to the HEART Act, if your spouse died in active service, you are allowed to take your life insurance proceeds and put it in a Roth IRA where it can grow tax-free, including when it is withdrawn or passed on.
To find out if you qualify for military survivor benefits, contact the Defense Finance and Accounting Service.
Take the Next Steps with Clarity
Losing a spouse is a life-changing and scary situation. We can help you manage your finances through the grieving process and find the survivor benefits you’re entitled to. Click here to learn more.