Survivor's Benefits & Disability Benefits (social security, 2015, state, years)

[SmittyZ3M]

Hello All,

My story is rather lengthy so please bear with me as I explain all of the details.

My mother fell ill to Parkinson's Disease in 2009. Prior to that, she worked, but never made much. In 2011, we applied for disability and her disability was backdated to 2009, so she received a large retroactive check, then started collecting monthly disability payments. My father was a partner in a company and made between $150,000 and $200,000 per year. He passed away suddenly in 2011 at 58.

When my Dad passed away, my Mom filed for his survivor's benefits. My Mom was 61 at the time, and she is 64 now. Again, my Dad was 58 when he passed away, and was still working. As I recall it, we were presented with two numbers from Social Security. "If you collect your husband's survivor benefits now, you will receive X, and if you wait until you are age ??, you will receive Y." The delta between the two was not substantial enough to wait, so she started collecting immediately.

Here we are in 2015 and my Mom collects $760 per month for her own disability and only $1322 per month for my Dad's survivors. My Dad made $150,000 - $200,000 for many, many years. Out of curiosity, I created an online account at ssa.gov today for myself (I am only 31 and made $110,000 last year) and it showed that if I were to become disabled tomorrow, I could collect $2,500.00 per month pursuant to what I have contributed since I started working at 16.

How is it possible that a 31 year old who has only been working for 15 years could collect more money in disability tomorrow than my Mom can collect on my Dad's survivor benefits after he worked for all of those years, with a lot of the years being 6 figure years? Something does not seem right to me.

What do you guys think? Any suggestions? Feel free to respond here or send me an e-mail.

Matthew R. Smith
Reading, PA
smittyz3m@gmail.com

[2sleepy]

maybe the $150-200k was not what he made, but reflected the revenue of the company?

[yellowsnow]

Right before your mom turns 65(assuming that is her FRA), check and see if 1/2 her husband's SS will be better than her Widow's Benefits. Might as well check on her own SS too and see how much that is. Also look at the difference in collecting now VS when she is closer to 70.

It looks to me like you need to compare disability VS SS Widow's Benefits VS 1/2 of husband's SS VS her own SS. And if she is on medicaid now, will she lose that and have to go to medicare?

Sounds like you need a spreadsheet! Don't hesitate to get some real expert advice!

[biscuitmom]

First thing is, you might want to delete your email address, this is a very public forum and you could start getting all kinds of spam.

Next, I haven't any personal experience with SSDI but it's apples and oranges to try to compare estimated direct disability benefits with actual payout of SS survivor benefits. SS is not and never has been been a straight dollars in - dollars out benefit. Your mom's payout is based upon an algorithm that includes several factors, a major one of which is her own age when she filed.
From my understanding, it's extremely rare for someone to be shortchanged when receiving SS benefits. If you think this is what's happened to your mom, then you should be talking directly with SS and might consider obtaining legal counsel if you're not satisfied with the answer.

If on the other hand, you're simply trying to understand the fairness of the allocation, you might consider posing your question to Tom Margenau who is the guru of all things SS. I think you can contact him at thomas.margenau@comcast.com.

[reed303]

I would second Biscuitmom's suggestion of contacting Tom M. Some months ago he helped me with an issue. Since your mom's issue involves SSDI, that adds to the already complex issue of deciding what claiming strategy is best in her situation. In your e-mail, provide as much detail as you can re ages, $$. BTW his email addr ends in .NET, not .com

Good Luck.......

[SmittyZ3M]

Thanks to all for your replies. I have touched base with the local SS office and my Mom and I will be giving them a call next week. I am simply requesting the formula that was used to calculate what her survivor's benefit would be. It just seems way too low to me. I will also touch base with Tom as well.

2sleepy - no, his personal income was 150k-200k.

Thanks again.

[RVcook]

Originally Posted by SmittyZ3M

Thanks to all for your replies. I have touched base with the local SS office and my Mom and I will be giving them a call next week. I am simply requesting the formula that was used to calculate what her survivor's benefit would be. It just seems way too low to me. I will also touch base with Tom as well.

2sleepy - no, his personal income was 150k-200k.

Thanks again.

Another resource to check out is Laurence Kotlikoff who writes a regular column that just deals with SS benefits for PBS on Making Sen$e.

One thing I learned from reading Larry's column is NEVER trust the people at the Social Security office as they constantly give out bad advice that can cost the beneficiary a LOT of money in the long run.

Based on your original post, you may want to read this article How Social Security cut benefits for millions of Americans without anyone knowing which may impact your mom more than you think. There has been a significant rewrite in the Social Security's POMS which may significantly change the way future benefits are allowed if a disabled person has been collecting SSDI for years prior to FRA and then want to collect survivor benefits. I'm not sure it will apply to your mom's situation, but definitely worth a read. If you're going to talk with someone at the SS office, you may want to ask them if your mom is indeed eligible to change her benefit whether she will be impacted by the rewrite.

RVcook

[SmittyZ3M]

Thanks for the response. I did browse through the link you provided and became confused rather quickly, so I will need to re-read a bit later.

Once point in the article which caught my attention is the following statement:

First, disability benefits automatically convert to retirement benefits at full retirement age unless you actively choose to withdraw that conversion.

So, when my Mom reached her FRA, which is either 65 or 66 (she was born in 1950), this tells me tha her disability will convert to retirement benefits, but what does that mean from a monetary standpoint?

[arwenmark]

Originally Posted by SmittyZ3M

Thanks for the response. I did browse through the link you provided and became confused rather quickly, so I will need to re-read a bit later.

Once point in the article which caught my attention is the following statement:

First, disability benefits automatically convert to retirement benefits at full retirement age unless you actively choose to withdraw that conversion.

So, when my Mom reached her FRA, which is either 65 or 66 (she was born in 1950), this tells me tha her disability will convert to retirement benefits, but what does that mean from a monetary standpoint?

Her retirement benefit when converted from SSDI will remain the same. What I don't understand is how she is able to collect SSDI and widows benefits on your father. It is always one or the other in SS benefits you cannot collect two checks as it were. Now they do figure what she is entitled to under her own benefits and then if it is less than the deceased husbands they add to her benefit to equal what your father was entitled to, but she would still only get one check or deposit as the case may be. Also if she took the widows benefit before Full retirement age that would be reduced for each month before full retirement age she was when she took it, and it does not go up when you reach full retirement age.

[SmittyZ3M]

I am not sure. The way it is now is that way it has always been. The third Wednesday of the month is when my mom's deposit shows up, and the forth Wednesday of the month is when her survivor's benefit shows up.

Perhaps they will be combined into one when she turns 66?