Am I Correct About How My Family's Benefits Would Be Calculated?

Jan 20 2020 - 2:15pm

I plan to file for SS at age 62, this year. My estimate for early retirement is $1986/mon. Full retirement amount shows $2755. I have a disabled daughter presently 35 but disabled pretty much from birth. When I called the SS office, I was giving an approximate amount for my daughter somewhere in the $900 figure. I have read in your forum that child benefit could be based on 50% of my full retirement amount. I was expecting to hear a figure of around $1377.5 based on my full retirement. My family max is $4822. My question is; am I correct
and where can I find the correct information on the SS web site so I can show them when I apply for my benefits. Also, I belive I read that because my wife takes care of my daughter, she would also receive benefits, on my record on a non reduced amount, and our combined benefits could not exceed the family max. Again, where can I find this information on the SS web site. Thanks, Ariel

Hi Ariel,

Well, you're correct that the unreduced benefit rate for a disabled child on the account of a living parent is based on 50% of the parent's primary insurance amount (PIA). A person's PIA is equal to the amount of their Social Security retirement benefit if they start drawing at full retirement age (FRA). Here is the pertinent reference from Social Security's operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203025.

You're also correct that a spouse can potentially qualify for spousal benefits at any age if they have a qualifying child in their care who is either under age 16 or disabled, and that such benefits are not reduced for age (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300202020). However, child in care spousal benefits as well as disabled child's benefits can be reduced due to the family maximum benefit (FMB), and it sounds like you may not fully understand how the FMB works.

The FMB represents the maximum possible amount that can be paid on a worker's record if the worker files at FRA. If the worker instead files for reduced benefits prior to FRA, the amount of that reduction is not redistributed to other family members (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300615756).

For example, here is how your family's benefits might be calculated based on the amounts shown in your question. If you file for your benefits at age 62 your reduced benefit rate would be calculated without any regard to the FMB. That would make your rate $1986 per your estimate. However, your full PIA would be deducted from your FMB when determining the amount available to be paid to family members. Thus, if your FMB is $4822 and your PIA is $2755, then $2067 (i.e. $4822 - $2755) would be the maximum amount that could be paid to your eligible family members. Your wife and child would normally each qualify for 50% of the amount of your PIA, but they couldn't both be paid that much without exceeding the FMB. So, they would have to split the remaining amount of the FMB available, which in this example would amount to $1033.50 each (i.e. $2067/2).

You should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to get an accurate estimate of your benefit rate and FMB, and to determine the best way to maximize benefits for you and your family.

Best, Jerry