What happens to your Social Security contributions?

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NothingButLove

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My wife is 58 and will turn 59 in January. She worked 31 years and her and her employers contributed over $100,000+ to social security. When she was diagnosed with ALS, she hadn't worked for 5 years so she didn't qualify for Social Security Disability (SSD). We had too much in retirement and assets to qualify for Supplemental Security Income (SSI).

If she passes away before she can collect social security, what happens to the $100,000+ she contributed? Just curious...

Rob
 

Nikki J

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1 if her benefit is greater than yours when eligible you can collect
2 do you have minor children? There is a benefit for them up to a certain age
3 there is not a specific little lump she owns. The money we put in is used generally.

Just like the people who are hit by a bus or have a heart attack. Lots of people die before collecting, others live long and collect more than they put in. My sister was in a similar situation. The amount that her daughter will get is nowhere near what she put in
 

Atsugi

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I'm sure you know this, but I'll write it for everyone to read:

Social Security is a collection of defined benefit plans that are funded by a tax.
If you make income from working, you must pay the tax. They only tax the first $120,000 (approx) of your income. If you are making ten million dollars yearly, only the first $120,000 (approx) is taxed by SS.
If you meet the requirements for one of the programs, SSDI or Survivors or such, then the govt pays you the benefit.

But it is NOT a savings account. That's a very common misconception. Many people think "i paid in, so now the government pays me." Nope.

What happens to the money? From the very first dollar she paid to the very last dollar she paid, it all went into the Social Security Trust Fund. And it has been used, since the very first day, to pay OTHER people their benefits.

To illustrate: The very first person to collect SS retirement benefits was Ida May Fuller. She worked for 3 years under the new SS law, paying in a total of $22. When she retired in 1940, SS paid her $24 per month for the rest of her life. She lived to be 100.

By contrast, let's say a medical student graduates and works (self-employed) for 30 years, making about $150,000 annually. (The doctor never marries and never has kids.) The doctor will pay SS tax of about 12% of the first $120,000 of their wages. (The other $30,000 of their wage is exempt.) So the doctor paid in over $400,000 to the system. But suddenly, the doctor dies before reaching 65--the normal retirement age--and thus will never see a penny of SS benefits.

Now, personally, in your case, it's in the middle. You will probably be entitled to Survivor's benefits. You'll get some percentage of her benefits. I personally have received about $20,000 annually since my PALS died at 50. I am 61. When I turn 62, I will have the option of receiving an amount based upon MY working contributions or receiving an amount based on HER working contributions. This is a SS program not many people are familiar with.

You need to call SS (it's an easy phone call). Better yet, I would visit the local office if you live in a city large enough to have one. You sit for awhile in the waiting room, but the person there can explain it all very well face to face and give you fairly exact amounts and exact dates the benefits begin. Call to make an appointment.
 
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Nikki J

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I thought the surviving spouse benefit only began at 60 ( and at areduced amount) unless the surviving spouse is disabled and or caring for a child receiving benefits due to age or disability? Mike I do not expect you to share publicly which applied to you if this is so. I do know you have kids.
 

Atsugi

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Ahh. Good catch. The OP is only 58, turning 59 in January, so what I wrote will not apply to him immediately.

Yes, I have kids. When they were young, we received checks monthly, to my account, for the purpose of their welfare.
When they aged out, coincidentally, I turned 60, and they paid me as the surviving spouse.
Soon, I'll be 62. SS has told me that, at that time, I can choose either my own benefits or my deceased spouse's benefits. Of course, she made much more money than I did, so I will choose her benefits, not mine.

If I'm wrong, please feel free to make it correct. But for now, I can't think about SS anymore--it makes my head hurt! :lol:
 

gooseberry

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So, if I understand correctly, when I turn 58, I can collect steves ssi benefit?

Is it dependent on if I am working?
 

Nikki J

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Is Julian still getting benefits ? I think you should be eligible now if so as long as he receives them. Otherwise it is 60 but a reduced amount or you can wait and get more. I don't think work makes you ineligible but reduces your benefit
 

gooseberry

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Julien is. They originally told me it was either Juluen or me
 

Nikki J

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That doesn't seem right. You care for Julien. . See here https://www.ssa.gov/planners/survivors/ifyou2.html

This portion should apply
receive survivors benefits at any age if you take care of the deceased worker's child who is under age 16 or is disabled and receives benefits on the worker's record.

I know there is a family max , is that the issue? Someone else also qualified?
 
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