Dear Rusty: Hypothetically, if I plan to sign up for Social Security at 70 and pass away before that, I will get nothing. My spouse would still get a boost in the amount she receives because I made more, but everything I put into the program vanishes. I haven’t reached my full retirement age yet and I still have income, but if I sign up now at 63 my benefits will be withheld due to my income. Then at full retirement age (presuming I elected to claim earlier) a re-calculation will take place and my monthly amount would be adjusted. Well, what happens if I decide to wait until 70 but pass away before I claim? Are my contributions repaid in a lump sum, or will I (or someone else) still lose everything? Signed: Uncertain About My Future Dear Uncertain: You are correct that if you pass away before collecting your earned Social Security benefits you won’t personally get anything. Social Security has, since inception, been a “pay as you go” program where those currently working and contributing to Social Security pay benefits for those currently receiving Social Security. That means that if you die before collecting, the monies you contributed will have already been used to pay other recipients, but the contributions you made may still entitle your dependents to benefits on your record. For those who are in their early 60s, average longevity is mid-80s, meaning your spouse would likely collect benefits on your record for more than two decades, any minor children could collect until they are adults, and any permanently disabled child you may have would get benefits from your record for the rest of their life as well.
