financial planning/death questions/social security for dependants

[SixFive]

I was going over my life insurance trying to figure if I had enough coverage. A friend mentioned that if I did die, my 2 children would also start recieving social security checks each month and sometimes the spouses do also. Is there anyway for me to calculate how much my kids would be sent each month or if my wife would get a check if I died? Is the amount figured on how much you make?

What happens with my 401k and Iras? Do they stay in an investment vehicle to be taken out at the surviving spouse's retirement time? Can the surviving spouse/beneficiary cash it out, and if so, is there a penalty?

Thanks, I can usually count on pretty accurate info here to things I don't know.

 

[taoist]

Warning: These are general statements and I'm no expert!!!



...with that aside, I would say that your life insurance, which is simply an income substitute if something (God forbid) were to happen to you, should be apporximately 10X's your annual earnings.... So, someone making $50k per year should carry approximately $500k in life insurance. That's just a ballpark figure....


As for the SS payments, you can contact a local SS office in your area and they should be able to help answer all of those questions. I really have no idea, but yes, the amount is calculated based on how much you've paid into SS over your lifetime.... I receive a statement from SS once a year that has my annual earnings listed and explains how much I would receive. Maybe your local SS office could help get a statement to you....


Your 401k and IRA's should have a beneficiary designation on them. You would need to ask a tax advisor (maybe there's one lurking out there), but I believe that they would be rolled over into your spouse's name, but I really don't know for sure. I think that if they are withdrawn your spouse would have to pay a penalty....


Where's bama6895? He's studying Tax Law in Alabama.... He should be able to help answer your questions.... You might ask Jack for his e-mail.

 

[loungelizard]

You should get a statement from the SS admin. about 6 weeks before your next birthday, it will have on it what your spouse and kids up to college age would receive each year less cola

 

[gardenweasel]

six

six

i worked for the administration in the disability area....not an expert in the the retirement or survivor field....

suffice to say,there will be a set amount for the family....your wife will get a widow`s benefit from that amount...and what`s left from what is called "the family maximum" will be divied up to the kids....call your local office...they`ll do a computation for you...

suffice to say,it will help,but i wouldn`t short change the life insurance....

can`t help with the 401k...

best plan is to hang around foe awhile

 

[taoist]

Six Five,

...remembered getting my letter from SS last week. Found website for you....


www.socialsecurity.gov/mystatement

or call SS at 1-800-772-1213

...you need to get SS to send you Form 8822 if you haven't received your personal letter in the last year. Good luck, buddy.

 

[djv]

Six Five there are so many options I would not know where to start. I only know that is true because of a friend that past away ar age 38. Then getting ready for early retirment as I just did. I found out even more interesting stuff. Taxes and ways to handle them is enough to get your attetion. Go to the bank you do most your banking. They should offer free consultation to you. Or your credit union I would hope runs free planning seminars two three times a year like they do here. Go see one of the above. They will answer many guestions. You can see a fiancial advisor also. But they can get a little pricei. But for sure Taoist is right on with insurance. Get enough till your old enough to need less. In 95% of the cases term is what you want. Cheaper and pays the same out if something happens. One person told me the way to make sure you have enough insurance is what Taoist said plus this. Look at your other investments. Ask your self what your goal is for them 10 years out. Now take that x 3 and cover it with insurance. So plus the example of 50K a year haveing 500K. If you hope to have 150k in your 401 in 10 years. Then thats another 450K of insurance. Why you ask. More breaks with the insurance on taxes then the 401k. Plus now your wife and children can leave your 401k alone to grow for 10 years. Im not sure how old you are. But the best thing is your doing something about it. So many dont or start to late. God Bless my Father he made me start at age 10. He always said you must pay yourself somehow. That you can always find a buck or two. But just do it.

 

[Spock]

Six Five ..

not an expert .. . and dont live in US .. . but the following may be helpful:

http://www.401khelpcenter.com/mpower/feature_1beneficiary.html

http://www.401khelpcenter.com/mpower/feature_2beneficiary.html

Hope this helps
Cheers !!!
Spock

On another Note:

For people who have a lot of time on their hands OR who want to know about investing and stuff pleaz check out the following:

http://www.faqs.org/faqs/investment-faq/general/part1/

There are 20 parts.

 

[taoist]

dave, six five & anyone else that happens to read this,


...graduated college (top 2%) with a finance major and this is some of the best, to-the-pont, most sound financial advice that I've seen in print...read it again gentlemen.

Get enough till your old enough to need less. In 95% of the cases term is what you want. Cheaper and pays the same out if something happens. One person told me the way to make sure you have enough insurance is what Taoist said plus this. Look at your other investments. Ask your self what your goal is for them 10 years out. Now take that x 3 and cover it with insurance. So plus the example of 50K a year haveing 500K. If you hope to have 150k in your 401 in 10 years. Then thats another 450K of insurance. Why you ask. More breaks with the insurance on taxes then the 401k. Plus now your wife and children can leave your 401k alone to grow for 10 years. Im not sure how old you are. But the best thing is your doing something about it. So many dont or start to late. God Bless my Father he made me start at age 10. He always said you must pay yourself somehow. That you can always find a buck or two. But just do it.

...thanks, dave.

 

[SixFive]

thanks. I started in a mutual fund at age 16 thanks to my dad too. I have what I think is a lot of term ins., just making sure it was enough. I had just never calculated in the SS for my kids.