I have been told that my two children, ages 14 and 16, may be eligible for Social Security when I file for my retirement benefits. Is this true? What can you tell me?
If you are age 62 or older and are still raising young children, there is a Social Security benefit strategy that you may be able to claim.
Here is how it works. When you file for Social Security retirement benefits, your minor children can get money based on your work record equaling half of what you would receive at full retirement age. Even if you were to take a smaller benefit by claiming earlier, your kids will get half of your full-retirement benefit.
To qualify, your child – whether biological, adopted or a stepchild – must be unmarried and under age 18. Kids over 18 but still in high school can collect until they graduate or for two months after they turn 19, whichever comes first. Special rules apply to children with disabilities.
Because your youngest child is 14, if you are married, your spouse can collect Social Security benefits on your work record too. The spouse's age is irrelevant to this benefit. The minimum age requirements to collect retirement benefits at age 62 or survivor benefits at age 60 do not apply when it comes to collecting benefits as the caregiver of a young child. The spouse's benefit will stop when the youngest child turns 16 and is worth up to half of your benefit, unless the spouse is eligible for their own benefits or meet the age requirements.
But note that there are limits to the amount of money that can be paid to a family. The Social Security "family maximum payment" is determined by a complex formula and can range from 150% to 180% of your full retirement benefit amount. If the total exceeds that, each person's benefit, except yours, is cut proportionately until it equals the maximum.
Let us assume that your full retirement age benefit is $2,400 per month. According to the Social Security formula, that would make your family maximum benefit roughly $4,200 per month. SSA.gov/oact/cola/familymax.html.
Subtract your $2,400 benefit from the $4,200 family maximum benefit, which leaves $1,800. That is the monthly amount that can be split between your two children – $900 each. If your spouse also wants to benefit, the monthly checks are $600 per person. However, the family amount remains the same.
Minor children can collect up to half of a disabled parent's Social Security disability benefit. If the parent passes away, the children will qualify for a survivor's benefit, which is up to 75% of the deceased parent's full retirement benefit.
To learn more, see the SSA publication (No. 05-10085) "Benefits for Children" at SSA.gov/pubs/EN-05-10085.pdf.
Social Security benefits for your kids may not be available before full retirement age if you are still working. In 2021, you will lose $1 in benefits for every $2 earned over $18,960, except in the year you reach full retirement age. In that case, the earnings limit is $50,520, with $1 in benefits withheld for every $3 earned over the limit.
If you lose your benefits, your dependents also lose theirs. You can recoup those payments later, but your kids cannot.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.