'You only get Social Security while you’re alive,' expert says. What happens to benefits after you die?

Social Security retirement benefits guarantee a monthly income throughout your retirement years. However, when you pass away, these payments cease.

According to Bruce Tannahill, a director of estate and business planning at MassMutual, "You only get Social Security while you’re alive."

Surveys indicate that retirees are often tempted to claim their benefits as early as possible to maximize their benefits from the program. However, financial advisors usually recommend the opposite approach, advising people to delay claiming in order to receive the largest possible benefit. By doing so, individuals can receive the highest monthly payments available to them.

Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator, emphasized the importance of considering Social Security in your estate planning. For example, if you claim retirement benefits at age 62, your benefits are reduced, and the survivor benefits available upon your passing are also reduced. Conversely, if you wait until age 70 to claim benefits—the maximum age for delaying monthly Social Security retirement checks—you'll see an increase in both your own benefits and the survivor benefit.

Furthermore, this additional income can help you preserve other assets that you can pass on to your spouse, children, and loved ones, as noted by Tannahill.

Here are key takeaways regarding what happens to Social Security benefits when you or a loved one passes away:

1. One-time death payment: A one-time lump-sum death payment of $255 may be available if specific requirements are met. Surviving spouses living with the deceased or those receiving Social Security benefits based on the deceased's record, even if living apart, may be eligible for this sum. If there is no surviving spouse, children of the deceased who qualify to receive benefits on their parent's record may be eligible. It is essential to notify the Social Security Administration promptly when a beneficiary dies to cancel their benefits, although funeral homes often report deaths to the agency.

2. Return of benefits for the month of death: Benefits received by the deceased in the month of death or after must be returned to the Social Security Administration. The handling of this rule depends on the timing of the death. If someone receives their monthly Social Security payment and then passes away, the Social Security Administration may not reclaim the funds. However, if the beneficiary dies before receiving their monthly Social Security check, it may need to be reimbursed.

3. Entitlement to benefits for surviving spouses and others: Certain family members may be entitled to survivor benefits based on the deceased beneficiary's earnings record as soon as the month of their death. This includes surviving spouses aged 60 or older. When both spouses have claimed Social Security benefits, and one passes away, the larger benefit typically continues while the smaller benefit ceases. However, there can be complexities, especially for long-term couples who were never formally married, cautioned Joe Elsasser, a certified financial planner and president of Covisum, a Social Security software claiming company.