Social Security Death Benefits
December 14, 2010 11:33 AM Subscribe
how do Social Security death benefits work for children
My girlfriend is widowed. She is getting a (imo) nice check from the ssa every month. What are the rules around investing that money for college? Is she allowed to put that in an IRA account?
My girlfriend is widowed. She is getting a (imo) nice check from the ssa every month. What are the rules around investing that money for college? Is she allowed to put that in an IRA account?
this is all the ssa info...http://www.socialsecurity.gov/pubs/10084.html#3
basically, once you have it, you can spend it how you please...
my cousin had theirs put into some type of investment account... and then he cashed out at 18...
posted by fozzie33 at 11:45 AM on December 14, 2010
basically, once you have it, you can spend it how you please...
my cousin had theirs put into some type of investment account... and then he cashed out at 18...
posted by fozzie33 at 11:45 AM on December 14, 2010
It's her money. She can do anything she wants with it, including putting it into a college savings account or IRA account.
posted by beagle at 11:45 AM on December 14, 2010
posted by beagle at 11:45 AM on December 14, 2010
I am not your lawyer but I am a lawyer and I deal with this stuff everyday. That being said, let me lay out the usual disclaimers that this is not to be construed as legal advice. Because I have not talked to your girlfriend, there may be factors of which I am unaware and this information must be considered to be incomplete.
The way that you've asked this question is confusing. From the part above the fold, it sounds as if your girlfriend is receiving survivor's benefits on behalf of her child or children, but from the part below the fold, it sounds as if she may be receiving widow's benefits. In fact, I would wager that she is receiving what SSA calls mother's benefits, i.e. benefits payable to her as the mother of the children of a deceased worker in her care. (I would wager that your girlfriend is not old enough to be receiving widow's benefits--she'd have to be over age 60 or over age 50 and disabled.)
If your girlfriend is receiving survivor's benefits as payee for her minor children, beagle is wrong; it is not her money. It is their money and she has a duty to spend it on them or conserve it for their future use or needs. To the extent that she does not need the money to meet their current needs, she can--and probably must--invest it on their behalf. An IRA is not the way to go, as investing in an IRA probably ties up the funds for longer than she is allowed to and results in penalties for early withdrawal, etc. As happened with woodvine and fozzie33's cousin, the conserved funds become the children's when they reach age 18. It would make no sense to have the money in an IRA when the children turn 18. A college fund, yes; an IRA, no.
Here is a link to SSA's manual that gives guidance on this topic:
POMS on use and accountability.
If she is receiving mother's benefits (or widow's benefits), then beagle is right. It is her money and she can do it with what she wishes.
posted by pasici at 1:31 PM on December 14, 2010 [1 favorite]
The way that you've asked this question is confusing. From the part above the fold, it sounds as if your girlfriend is receiving survivor's benefits on behalf of her child or children, but from the part below the fold, it sounds as if she may be receiving widow's benefits. In fact, I would wager that she is receiving what SSA calls mother's benefits, i.e. benefits payable to her as the mother of the children of a deceased worker in her care. (I would wager that your girlfriend is not old enough to be receiving widow's benefits--she'd have to be over age 60 or over age 50 and disabled.)
If your girlfriend is receiving survivor's benefits as payee for her minor children, beagle is wrong; it is not her money. It is their money and she has a duty to spend it on them or conserve it for their future use or needs. To the extent that she does not need the money to meet their current needs, she can--and probably must--invest it on their behalf. An IRA is not the way to go, as investing in an IRA probably ties up the funds for longer than she is allowed to and results in penalties for early withdrawal, etc. As happened with woodvine and fozzie33's cousin, the conserved funds become the children's when they reach age 18. It would make no sense to have the money in an IRA when the children turn 18. A college fund, yes; an IRA, no.
Here is a link to SSA's manual that gives guidance on this topic:
POMS on use and accountability.
If she is receiving mother's benefits (or widow's benefits), then beagle is right. It is her money and she can do it with what she wishes.
posted by pasici at 1:31 PM on December 14, 2010 [1 favorite]
The SSA money I got when my mom died was put into a Roth IRA.
posted by sulaine at 6:45 PM on December 14, 2010
posted by sulaine at 6:45 PM on December 14, 2010
The parent can spend or invest it on behalf of the minor child, given the guidelines pasici linked above (your gf should have gotten a print copy of that manual the last time it was updated; I know my dad used to get a new copy every time they made changes to it). Investing it for the child's benefit is A-OK.
posted by Sidhedevil at 6:57 PM on December 14, 2010 [1 favorite]
posted by Sidhedevil at 6:57 PM on December 14, 2010 [1 favorite]
This thread is closed to new comments.
posted by woodvine at 11:45 AM on December 14, 2010