Starting SSA retirement – consider family benefits

One consideration mentioned this week for starting Social Security when younger than full retirement age was if Social Security benefits through your record are payable to family members. Using benefits to children, today I will provide an example of this. Benefits to children are not the only potential family benefits payable. This is just a general example.

When you qualify for Social Security retirement, your children may also qualify to receive benefits on your record. An eligible child can be your biological child, adopted child or stepchild with other categories possible. To receive benefits, the child must be unmarried and under age 18, be 18-19 years old and a full-time student (no higher than grade 12) or be 18 or older and disabled from a disability that started before age 22. Normally, benefits stop when children reach age 18 unless they are disabled. However, if the child is still a full-time student at a secondary (or elementary) school at age 18, benefits continue until the child graduates or until two months after the child becomes age 19, whichever is first. 

Starting your Social Security retirement when younger than full retirement age (FRA) permanently reduces the monthly amount paid to you. Amounts paid to others on your record will not reduce your own amount. Your personal amount is the same whether benefits on your record are paid just to you or to you and family members.

If you receive SSA retirement, an eligible child can receive up to a maximum 50 percent of your full retirement age (FRA) amount per month, not 50 percent of your reduced monthly benefit.

Based on career earnings and full retirement age amount, there is a maximum amount of family benefits payable through a person’s work record. Obtain an estimate of this amount on your Social Security Statement after creating a my Social Security account. If your earnings have been very low, it is possible that no family benefits are payable. More usual is that this maximum is reached once you and approximately two children are receiving benefits. Maximums vary based on individual work records but, once reached, additional eligible family members proportionally reduce the amount that other family members receive. All eligible children receive the same monthly amount.

For this example, say that your full retirement age (FRA) is 66 (birth years 1943-1954), your amount at FRA is $1,000 per month, and you have an eligible child. If starting Social Security at FRA, your monthly amount would be $1,000. This would be less or more if starting benefits when younger or older.  However, child’s benefits are based on the FRA amount, not the amount you are actually receiving. In this example, a child could receive up to $500 per month on your record.

Starting SSA retirement at FRA, your amount would be $1,000 and the child would receive $500 for a total of $1,500 per month. If you start reduced retirement at age 62, your amount is reduced to $750 per month but the child’s amount remains at $500 for a total of $1,250 per month.

Estimate your FRA amount with the online Retirement Estimator.

Depending on your plans and other income, perhaps child or other family benefits make early retirement worthwhile for you. Perhaps not.

Eligibility rules for your children are the same for Social Security retirement, survivors or disability benefits but amounts differ. If you receive SSA retirement or disability benefits, an eligible child can receive up to 50 percent of your full retirement age (FRA) amount per month. If you are deceased, an eligible child can receive up to 75 percent of your FRA amount per month. Other family members receiving benefits through your record can reduce these amounts.

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