Question on the application of the Social Security Family Maximum
Here’s my situation:
At 66 I filed and suspended my social security benefits.
I have a 15 year old daughter at home.
Currently, my wife is receiving a Social Security benefit for a “child in care” and my daughter is receiving a benefit as well. My understanding is that my daughter will continue to receive her benefit until she is 18 and my wife will receive her “child in care” benefit until my daughter is 16.
My question is, if I decide to take my benefits before I turn 70, do the “spousal child care” and “child under age 18” disappear?
It is likely that most, but not all, of these “auxiliary” benefits would go away if you filed for your Social Security benefits. This is due to the family benefit maximum which limits the amount of benefits that can be paid on one person’s record ( a range of 150-180% of that individual’s full retirement age benefit amount). For an in-depth understanding of this rule I’d recommend reading the information on the Social Security’s website that discusses this. Here’s a quick summary.
Currently, your spouse is receiving 50% of your full retirement age benefit (also called your PIA) as a “child in care spousal benefit.” She will continue to receive this until your daughter turns 16.
Your daughter is also receiving 50% of your full retirement age benefit and will continue to do so until she turns 18 (generally–see Benefits For Your Children for more information).
When you file at age 70 you will be receiving 132% or your full retirement age benefit (due to the effect of delayed retirement credits). This means that since the maximum total range is 150%-180%, there will only be somewhere between 18% – 48% of your full retirement age benefit that can be paid out to a spouse or child.
If you situation, this will almost be a non-issue since the payment to your spouse for the child in care benefit will expire shortly before you turn 70.
A note for all readers.
I love Social Security questions! I’ll answer them privately as time allows, but if I think the answer will benefit a wide audience, I’ll also publish them on my blog. Don’t worry, I’ll change up enough personal details so you’ll stay unknown. Send your questions to firstname.lastname@example.org.
If you need individual and specific help, I’m always available for a consultation.
As a final resource, read my article on other ways to find answers to your Social Security questions.