On paper, the Social Security system has a generous payment to beneficiaries of someone who retires, dies, or becomes disabled. But what catches many people by surprise is that there’s a limit to these payments.

The Social Security family maximum benefits rule may stop you from getting the full amount you might expect.

This article takes a very deep dive into the issue to explain both the common, well-known rules around the Social Security family maximum benefits — and the more obscure rules that cause benefits to be capped to a range of 150%-188% of a retired, deceased or disabled individual’s full retirement age benefit.

We’ll also go over the calculation, and teach you how to determine what kinds of benefits to expect in your own situation.

The Social Security surviving spouse benefit seems easy enough to understand. But hidden in the details are small nuances that can cost you – or your loved ones – thousands of dollars in missed benefits.

If you invest the time to make sure you know the rules, you won’t end up like the 10,000 people that a 2018 Office of the Inspector General report discovered had been shortchanged by $131 million in Social Security survivor benefits.

Here, we break down what you need to know about ensuring you receive all the benefits you’re entitled to in three, easy-to-digest sections:

It’s rare for me to have a guest article on my site. However, a few weeks ago, I had a meeting that disturbed me. As soon as the meeting was over I contacted Texas Elder Law Attorney John Ross and asked him to write this guide for my readers on how to use Medicaid Long Term Care to pay for nursing home expenses.

I just couldn’t see a story like this happen again.

It’s been a few weeks now, but I still think about this meeting often. Listening to the woman that I met with her and her story was heartbreaking. I felt so sorry for her — but there was nothing I could do to help her.

I’m sharing her story with you here in hopes that someone else won’t make the same mistakes.

Jo’s husband died when he was 44. Jo was only 43, and up until that point, they ran a successful plumbing supply business together. Jo and her husband earned a high income, and his passing left her with the burden of running a demanding business alone.

She didn’t spend a lot of time thinking about her future Social Security benefits at that point of her life. But things are different now.

Jo is about to turn 60. She’s been told that she can qualify for Social Security survivors benefits, and has also heard that the Social Security Administration has a history of miscalculating these benefits — so Jo wants to make sure she understands the math herself.

You Can’t Use the Normal Calculations to Understand Social Security Survivors Benefits

Turning 66 in 2019? That means the maximum Social Security benefit you could receive is $2,861.

That’s no small sum! If you wanted to get that same amount of income from a portfolio of retirement savings you’d need A LOT of money at the beginning of your retirement.

And it could get even better for you if you waited to file for Social Security. In 2019, the maximum benefit for an individual who delayed filing for benefits until age 70 is $3,770 per month. That’s more than $45,000 per year in benefits!

With dollars like these at stake, it makes good sense to pay attention to the best filing strategies for you — and how to potentially claim the maximum Social Security benefit.

What’s one of the most generous benefits available to retirees? That’s easy. It’s Social Security spousal benefits! These benefits are some of the most important, too.

Why? Because the spousal benefit can give your household income a big boost if you know all the rules about how to use it.  

A recent Social Security report found that 2.3 million individuals received at least part of their benefit as a spouse of an entitled worker. Some of these spouses had benefits of their own, but were eligible to receive higher benefit because the spousal benefit amount was greater than their own benefit.

Others never worked outside the home or paid Social Security tax. They have no benefit of their own, but thanks to the Social Security spousal benefit available under their spouse’s work record, they can still receive payments.

This particular benefit doesn’t just provide retirement income, either.

As an eligible spouse, you could also receive premium-free Medicare benefits. Receiving these can help you reduce your out-of-pocket healthcare costs, allowing you to stretch your nest egg even further to create the retirement you want.

Clearly, Social Security spousal benefits offer serious value to those approaching the right age to file. So how do you access them, and what do you have to know to best work the rules?

Let’s take a look at what it takes to qualify as well as what benefits you may receive as an eligible spouse.

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If you’re building a retirement income plan (and I hope you are!), Social Security will likely play a role. As such, you need to know what to expect in Social Security benefits when constructing your plan to ensure it works.

Unfortunately, your Social Security benefits estimate from the statements you can pull from the Social Security Administration is not the best source of information on what to expect in the future.

The issue lies with the omissions that the Administration makes with their estimate methodology. To understand why this is a problem, we need to start with a basic overview of the calculation used to create your Social Security benefit estimate.

If you haven’t yet reached your full retirement age but want to file early for your Social Security benefits, you need to know there’s an earnings limit.

In other words, if you earn over a certain amount of income… your benefits may be reduced.

We’ve talked about this at length on both this blog and my YouTube channel, and we field a lot of questions about this topic. One of the questions I hear all the time from married couples is this one:

“Whose earnings are they counting? If you’re married, can your spouse’s earnings affect your Social Security benefit?”

You may already know that if you’re under full retirement age and file for Social Security benefits, there’s a limit to the amount of income you can make before your benefit is reduced — or shut off completely.

But there’s one big question that keeps coming up when I talk to people about this topic: What counts as income?

With a system as complex as Social Security, it’s inevitable that misinformation (or simply a misunderstanding of the facts) will spread. It’s hard to understand what’s true and what’s not, and often, our brains prefer the version of events that feel intuitively more simple to understand.

And of course, Social Security is anything but simple to understand.