This benefit, called a survivor benefit, stops when the youngest child reaches age 16. The survivor benefit starts again when the surviving spouse reaches age 60.
The period of time in between the time the youngest child turns 16 and the time the surviving spouse turns 60 is referred to as the ‘blackout period.’
Most people who collect survivor benefits are subject to this blackout period. The only situation in which there would be no blackout period would be if the surviving spouse were 44 years old or older when their youngest child was born.
In that case, the survivor would be 60 years old by the time the youngest child turned 16, so there would be no blackout period.
Here’s an example. John and Mary are a married couple with two children. John is 40 years old, Mary is 35, and the children are 10 and 6 when John dies.
Mary can receive survivor benefits for ten years, until the youngest child turns 16 years old.
Then, when Mary turns 60, she can receive survivor benefits again. She would receive a reduced benefit if she filed at age 60, but she would get a full benefit if she filed at full retirement age or older.
The term ‘blackout period’ is a little bit of a misnomer, since it’s actually two different kinds of survivor benefits.
The surviving spouse receives benefits for caring for a child or children up to age 16, and then receive retirement benefits as early as age 60.
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Make Sure Your Life Insurance Fills the Gap
Many people buy life insurance to protect their family in the event of their premature death. They may calculate the amount of money their family needs on an annual basis and determine how much life insurance would be required to replace that money.
Sometimes these calculations fail to take the blackout period into account, which could leave a surviving spouse without enough money to live comfortably.
It could be argued that the most expensive time for a parent is after the child is 16.
Paying for college is difficult enough with two parents working; if one parent has passed away, it will be even harder.
The solution to this dilemma is to be sure to purchase enough life insurance coverage to account for the blackout period. The trick is figuring out how much life insurance is enough.
When you are trying to determine the amount of life insurance you need, assume that the policy will need to replace all your income for the years beginning when your youngest child turns 16 and ending when your spouse turns 60, and about 60 to 70 percent of your income in the years before and after that time.
Even the Social Security Administration admits that Social Security only replaces about 40 percent of pre-retirement income for the average worker. If your income is high, the percentage will be even less.
There are many life insurance calculators available that will tell you, based on your income and age, how much insurance you should buy to make sure that your family can still live comfortably if you were to die.
This is one way to figure it out, but it’s helpful to know if the calculator is accounting for the blackout period. To be on the safe side, select the option that says you’re not eligible for Social Security, if there is one.
Term Life Insurance May Be Your Best Bet
The least expensive way to provide for your family if you’re not around to do it is by purchasing term life insurance. You only pay for the duration of the policy “the term.”
The younger you are when you purchase a term policy, the less money you will pay.
Many people buy a term policy that will cover them until the children are out of the house, or until the mortgage is paid off.
Just keep in mind that your spouse won’t be able to collect a survivor Social Security benefit until they are over 60, once the youngest child has turned 16.
If you were relatively young when you had children, this could be twenty years or more.
Just keep in mind that your spouse won’t be able to collect a survivor Social Security benefit until they are over 60, once the youngest child has turned 16. If you were relatively young when you had children, this could be twenty years or more.
When you buy term life insurance, as with many other purchases, the more you buy, the lower the average cost.
So a term policy with a face value of $1,000,000 will usually be less than twice the cost of a $500,000 policy.
Term insurance, in general, is very reasonably priced, particularly if you compare companies to get the best rate, so don’t hesitate to buy as much as you think you need, or maybe even a bit more.
You work hard to support your family, and you want to protect them. Having enough life insurance to support your spouse, even during the blackout period, is a good way to make sure they’ll be provided, no matter what.
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