I will be 62 years in 2017. My yearly income is about $19000. I have a 9 year old child and wife (45) who is not earning any income. Would it be best to withdraw social security benefits this year and what amount would I get for my child? Would my wife get a benefit as well? What are the drawbacks from collecting early? Would I get penalized since I make more than $16920 ( according to the SS limit), even though we are at Federal poverty level for a family of 3?

Hi,

When to file for benefits is a personal decision, and the best choice depends on many factors. If you do file for benefits this year, Social Security will need to withhold $1 of the benefits payable on your record for each $2 that you earn in excess of $16,920, although you could be paid for any month(s) in which you earn less than $1410 (https://www.ssa.gov/planners/retire/rule.html). So, if you plan to earn $19,000 this year, you would likely lose about $1,040 (i.e. ($19000 - $16920)/2) of benefits to the earnings test.

Your child could potentially get a benefit of up to 50% of your full retirement age rate (PIA), and your wife could as well if she has your child in her care. However, there is a family maximum benefit that would limit the total amount payable to your wife and child if they are both drawing. The resulting benefit rate for each of them would be between 25% to 40% of your PIA.

The main drawback to filing early is that your benefit rate will be permanently reduced depending on the number of months that you receive payments prior to full retirement age. Before filing, you should strongly consider using the maximization software available on this website to explore all of your options and determine the best filing strategy for you and your family.

Best, Jerry