TUESDAY, APRIL 8, 2014
What is the Blackout Period for Social Security?
Widows or widowers and children, termed, "survivors" by the Social Security Administration, are eligible for survivor benefits if the surviving spouse is left to care for children under the age 16. When the youngest child becomes of age, the benefits stop and won't resume until the surviving parent reaches age 60. The period during which the surviving spouse doesn't receive benefits from Social Security is called the blackout period.
Children are also beneficiaries of Social Security if they are under age 18 or 19 (if still in school). Payments are made to the surviving spouse and are 75 % of the deceased's primary insurance amount. A maximum family benefit applies and ranges from 150 to 188 % of the deceased's (PIA). For a survivor not to endure the blackout period, the survivor must have had his or her last child after age 44.
The most common way to protect a spouse from the earnings shortfall that occurs during the blackout period is by purchasing life insurance. Term life insurance provides protection during a predetermined period of time, usually 15, 20 or 30 years. It's not an investment; the surviving beneficiary receives a payout when the policyholder dies.
Did you know about this blackout period? Probably not. Do you have enough life insurance? Probably not.
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