Does the survivor benefit amount decrease if you are fired? I'm wondering if it's based on average earnings which are high now but won't be after 10 years of FIRE or batista FIRE.
No. The survivor benefit is based upon your PIA, not average earnings. It can only increase or stay level (in nominal terms).
From what I've seen in my own myssa account, the estimate the SSA provides for survivor's benefits assumes I will continue working between now and whenever I might pass. The survivor's benefits they estimate are based on a higher PIA than I've earned so far.
What I posted is correct.
You're looking at an estimate, and it's not what you would earn. You should calculate what you've actually accrued rather than using the estimates. Once you know the PIA you've actually accrued, everything follows from that. You can calculate your survivor benefit.
Here's what the SSA states at https://www.ssa.gov/benefits/survivors/onyourown.html:
"How much your family could receive in [survivor] benefits depends on your average lifetime earnings. The higher your earnings were, the higher their benefits would be. We calculate a basic amount as if you had reached full retirement age at the time you die."
It's not clear what formula they use to "calculate a basic amount as if you had reached full retirement age at the time you die," but it certainly appears to be more than the PIA one has actually accrued.
The PIA I've actually accrued is $1,037/mo, but if I died this year my spouse and children would each be eligible to receive $1,635/mo in survivor's benefits. (As a side note, the total family benefits provision would limit the total monthly about to $3,905.)
No, it's not average lifetime earnings - they're misleading you. They say 'average,' but that's the same as all PIA calculations: it's the average of your working years, with every year you didn't work averaged in as zero. If you worked only one year at the cap and then die, you don't a huge amount just because your one year was at the max; your amount is calculated based upon that one year, plus 34 years at zero.
The reason they say 'as if you had reached full retirement age when you die' is because you're not penalized for taking your benefit before FRA as you would be for other calculations (e.g. taking your benefit when you hit 62 rather than 67).
As I noted, your survivor benefit is not your PIA, it's *based* upon your PIA. Each eligible beneficiary gets 0.75* accrued PIA. However, there is a separate family maximum for survivor benefits...which is complicated but once again based upon PIA. Note that there also can be income-based reductions.
It took some digging, but I think I've found the key to unlocking the full formula. (TLDR: Yes, FIREing or coast FIREing can reduce the amount of survivor's benefits your relatives are eligible to receive.)
Here's the key: your PIA is different if you retire at 40 and die at 62 than it is if you die at 40.
"In the case of workers who die before turning 62 years old, the number of computation years is
generally reduced below 35 by the number of years until he or she would have reached 62."
(From page 5 of this PDF:
https://fas.org/sgp/crs/misc/R43542.pdf)
If you die at 62, your PIA is calculated based on your highest 35 years of earning. But if you die at 40, your PIA is calculated based on your highest 13 years of earning. (62 - 40 = 22 years until you would have reached 62. 35 computational years - 22 = 13 computation years.)
Assuming a long life and no future earnings, my current accrued PIA is $1,037. But if I die this year, the calculation changes and my PIA will be $2,180 dollars. My spouse and children would each be eligible to receive 75% of that PIA - $1,635/mo - for the immediate future. (My spouse's benefit would stop when the youngest child turns 16, and the children's benefit would stop when they turn 18 or when they finish high school, whichever comes later. And of course the total family benefits provision would limit the total monthly amount.)
If I were to FIRE this year, that expected $2,180 PIA would reduce every year that I remain alive without earning any money. And as a result, the expected survivor's benefits my family would receive until the children are 16/18 would also reduce every year.
