Can an adult
daughter tap into her late mother's benefit?
Russell Settle • December 17,
2020
Welcome to our “Social
Security Q&A” series. You ask a question about Social Security, and a guest
expert answers it.
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a question of your own below. And if you would like a personalized report
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Today’s question comes
from Brenda:
“My mother passed away
several months ago at the age of 71. She claimed her Social Security benefits
at the age of 66. So, she received benefits only for five years. In contrast,
she worked and paid Social Security taxes for 45 years. As a result, she paid
far more into the Social Security system than she got out of it.
Is it possible for me —
her adult daughter — to get the difference between what she paid and what she
received? If so, how?”
A basic
misunderstanding of Social Security
Brenda, you appear to be
thinking of Social Security as something similar to a saving account or an IRA
— a financial instrument that can be passed along to others at the time of a
person’s death. The Social Security system does not work that way.
Social Security is a set
of insurance programs. In fact, the legal name for Social Security is the Old Age, Survivors,
and Disability Insurance program. It is designed to partially
replace income lost due to retirement, disability or death. Social Security has
never served as a personal savings account for individuals.
Brenda, over the years I
have discussed this topic with many clients. Once they see Social Security as a
set of insurance programs rather than as IRA, they generally understand how
your mother’s situation can be a reasonably fair one.
As with any insurance
policy — such as auto, homeowners or life insurance — many Social Security
beneficiaries will receive less in cash benefits (insurance payouts) than they
paid in Social Security taxes (insurance premiums). But, that fact does not
diminish the value of the insurance coverage provided by the disability and
survivors parts of the program.
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About
me
I hold a doctorate in
economics from the University of Wisconsin and taught economics at the
University of Delaware for many years.
In 2009, I
co-founded SocialSecurityChoices.com,
an internet company that provides advice on Social Security claiming decisions.
You can learn more about that by clicking here.
Disclaimer: We
strive to provide accurate information with regard to the subject matter
covered. It is offered with the understanding that we are not offering legal,
accounting, investment or other professional advice or services, and that the
SSA alone makes all final determinations on your eligibility for benefits and
the benefit amounts. Our advice on claiming strategies does not comprise a
comprehensive financial plan. You should consult with your financial adviser
regarding your individual situation.
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