Discover How the Latest Bill Could Boost Your Social Security by $2,000+
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In the golden years of life, when the hustle of the workforce is behind us, Social Security benefits become a cornerstone of financial stability for many American seniors.
These benefits, which are a lifeline for retirees and individuals with disabilities, are now at the center of a significant legislative proposal that could bring a substantial increase to the Social Security lump sum death payment—a change that hasn't been seen since 1954.
Yes, you read that correctly. The Social Security lump sum death payment has not been increased in 70 years.
For decades, Social Security has provided monthly payments to support seniors in retirement and those living with disabilities. In addition to these ongoing benefits, a one-time lump sum death payment is available to survivors of Social Security beneficiaries. This payment, intended to assist with funeral expenses and other costs associated with a loved one's passing, has remained stagnant at $255.
As the cost of living continues to rise, the $255 death benefit has become increasingly insufficient. Inflation has not only affected everyday expenses like groceries and healthcare but has also significantly driven up funeral costs.
According to the National Funeral Directors Association, the average cost of a funeral with cremation is now around $6,280, while a traditional funeral with a casket can reach approximately $8,300. This stark contrast highlights the growing gap between the death benefit and the actual costs faced by grieving families.
Recognizing the financial strain on families during one of life's most challenging moments, Democratic Vermont Senator Peter Welch has introduced the Social Security Survivor Benefits Equity Act. This bill proposes to increase the lump sum death payment to $2,900, reflecting the current inflation levels and providing much-needed relief to survivors.
The proposed increase is not only a response to inflation but also an acknowledgment of the changing economic landscape. Finance expert Kevin Thompson, founder and CEO of 9i Capital Group, supports the bill, stating that it would “help offset the average cost of funerals and other arrangements in the event of death.”
While the bill has garnered attention and support, its passage is not guaranteed. Joseph Patrick Roop, president of Belmont Capital Advisors, cautions that political and budgetary challenges could impede the bill's success. Social Security reform is a hotly debated topic, and any legislation that seeks to expand or adjust benefits must navigate a complex legislative landscape.
If passed, the increased death benefit would take effect in 2025, based on the consumer price index for urban wage earners and clerical workers. This change would mark a significant shift in how Social Security supports beneficiaries and their families during times of loss.
Survivors who are eligible for the death payment must apply within two years of the death of their spouse or parent. The benefit is typically awarded to a surviving spouse, but in their absence, it can be allocated to the deceased's children.
Additionally, survivor benefits extend to spouses aged 60 or older, those 50 or older with disabilities, or a spouse caring for the deceased's child. Children, stepchildren, grandchildren, and dependent parents may also qualify under certain conditions.
Financial literacy instructor Alex Beene from the University of Tennessee at Martin emphasizes that while the current lump sum payment may have been adequate in the past, it is woefully inadequate today. The proposed increase to over $2,900, though still a one-time distribution, represents a logical and overdue adjustment to support those affected by a loved one's passing. Beene went on to say, it is “a logical step that, quite frankly, is one that should have been made long ago."
We invite you, members, to share your thoughts on this proposed bill. Have you or someone you know been affected by the current death benefit amount? How would this increase in the Social Security lump sum death payment affect you or your family? If you feel comfortable to do so, please tell us in the comments below!
These benefits, which are a lifeline for retirees and individuals with disabilities, are now at the center of a significant legislative proposal that could bring a substantial increase to the Social Security lump sum death payment—a change that hasn't been seen since 1954.
Yes, you read that correctly. The Social Security lump sum death payment has not been increased in 70 years.
For decades, Social Security has provided monthly payments to support seniors in retirement and those living with disabilities. In addition to these ongoing benefits, a one-time lump sum death payment is available to survivors of Social Security beneficiaries. This payment, intended to assist with funeral expenses and other costs associated with a loved one's passing, has remained stagnant at $255.
The Social Security lump sum death benefit has not changed since 1954. Image source: Pexels.
As the cost of living continues to rise, the $255 death benefit has become increasingly insufficient. Inflation has not only affected everyday expenses like groceries and healthcare but has also significantly driven up funeral costs.
According to the National Funeral Directors Association, the average cost of a funeral with cremation is now around $6,280, while a traditional funeral with a casket can reach approximately $8,300. This stark contrast highlights the growing gap between the death benefit and the actual costs faced by grieving families.
Recognizing the financial strain on families during one of life's most challenging moments, Democratic Vermont Senator Peter Welch has introduced the Social Security Survivor Benefits Equity Act. This bill proposes to increase the lump sum death payment to $2,900, reflecting the current inflation levels and providing much-needed relief to survivors.
The proposed increase is not only a response to inflation but also an acknowledgment of the changing economic landscape. Finance expert Kevin Thompson, founder and CEO of 9i Capital Group, supports the bill, stating that it would “help offset the average cost of funerals and other arrangements in the event of death.”
While the bill has garnered attention and support, its passage is not guaranteed. Joseph Patrick Roop, president of Belmont Capital Advisors, cautions that political and budgetary challenges could impede the bill's success. Social Security reform is a hotly debated topic, and any legislation that seeks to expand or adjust benefits must navigate a complex legislative landscape.
If passed, the increased death benefit would take effect in 2025, based on the consumer price index for urban wage earners and clerical workers. This change would mark a significant shift in how Social Security supports beneficiaries and their families during times of loss.
Survivors who are eligible for the death payment must apply within two years of the death of their spouse or parent. The benefit is typically awarded to a surviving spouse, but in their absence, it can be allocated to the deceased's children.
Additionally, survivor benefits extend to spouses aged 60 or older, those 50 or older with disabilities, or a spouse caring for the deceased's child. Children, stepchildren, grandchildren, and dependent parents may also qualify under certain conditions.
Financial literacy instructor Alex Beene from the University of Tennessee at Martin emphasizes that while the current lump sum payment may have been adequate in the past, it is woefully inadequate today. The proposed increase to over $2,900, though still a one-time distribution, represents a logical and overdue adjustment to support those affected by a loved one's passing. Beene went on to say, it is “a logical step that, quite frankly, is one that should have been made long ago."
We invite you, members, to share your thoughts on this proposed bill. Have you or someone you know been affected by the current death benefit amount? How would this increase in the Social Security lump sum death payment affect you or your family? If you feel comfortable to do so, please tell us in the comments below!
