$2,000 increase in Social Security benefits – Would affect survivor benefits if passed

Social Security benefits are complex and often knowing all the intricacies of the program is not possible until specific situations arise and you need to solve them. For example, many people may not be aware of the fact that when a Social Security beneficiary dies, their family members can also get survivor benefits through a lump sum death payment.

Since this was implemented in 1954 the amount has been $255, with no changes. And while once upon a time this sum may have been very helpful to grieving families, this sum is nowadays no more than a drop in the bucket in the sea of mounting death costs.

Since the purpose of this sum was to alleviate the burden of funeral expenses for the grieving families, the fact that it is now impossible to cover a portion of a simple funeral with it puts the strain on families one again. Lawmakers have seen the impact this paltry sum has had over the years and have banded together to compose the Social Security Survivor Benefits Equity Act in an attempt to even out the scales.

Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, explained “This would be a major step in aligning the death benefit with current inflation-adjusted dollars. This will help offset the average cost of funerals and other arrangements in the event of death.”

The new Social Security death benefit bill improvement

Proposed by Democratic Vermont Senator Peter Welch and supported by Senator Bernie Sanders of Vermont and Democratic Senator Elizabeth Warren of Massachusetts, the new law would increase the death benefit to $2,900 to reflect today’s inflation levels

As Welch stated “Funeral costs should be the last thing on the minds of grieving families when they lose a loved one. But because benefits designed to help folks afford funeral expenses haven’t kept pace with inflation, the cost of burying a loved one has become top of mind for many mourning families.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin supports the new measure “While that small payment may have assisted beneficiaries in past decades, the dramatic cost in living makes that amount seem shockingly low by today’s standards. The new payment would be over 10 times this amount, while still being a one-time distribution to help those affected by a loved one’s passing. It’s a logical step that, quite frankly, is one that should have been made long ago.”

When the original $255 lump sum death payment was approved the average cost of a funeral was just $700, making the amount a big help for families. Today that same service would cost an average of $6,280, according to the National Funeral Directors Association.

The measure is popular and should not encounter much resistance as, according to Thompson “People often snicker at the amount of money the Social Security death benefit, and it at least needs to be increased to be in line with inflation. This will help families tremendously during these trying times as families quite often have to raise money to bury their loved ones.”

However, people like Joseph Patrick Roop, the president of Belmont Capital Advisors, have some reservations about the future of the bill” The bill to raise the Social Security death benefit has garnered attention, but its chances of passing remain uncertain due to political and budgetary challenges. Bills that aim to expand or adjust Social Security often face hurdles, especially given the broader debate on Social Security’s solvency and potential reform.”

If the bill does end up passing, the change would start as early as 2025 and the $2,900 amount will be deposited into eligible families’ accounts without further delays.

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