RE: COMBINED Family Maximum. My wife and I are about to start collecting Social Social Security. We are 62 ..... (we can wait if it is better to do that)......we have an adult child collecting SSD and SSI ........The adult disabled child gets SSD and SSI.....My wife's SS will be little above average (about 2,220 at full retirement age) ....mine other is very low......I have seen the family maximums on myssa.gov for both accounts We understand that "Family Maximum" limits us, however "Combined Family Maximum" may help us? ....We are happy to pay someone to guide us as to what to do ....Does you have some helpful thoughts please?
Hi. If both you and your wife are collecting Social Security retirement or disability (SSDI) benefits and if you have a disabled adult child (DAC) who's eligible for benefits on both of your accounts, then the family maximum benefit (FMB) on your account can be combined with the FMB on your wife's account in order to potentially free up more total monthly benefits to be paid. One of the most important things to understand about the FMB or the combined FMB (CFMB) is that they're the upper limits on how much can be paid to a family. There's no guarantee that the full CFMB can be paid, and whether or not it will be depends on the individual circumstances involved.
For example, if you and your wife start drawing your benefits prior to your full retirement ages (FRA), the amount that your benefit rates are reduced for age would not free up more of the CFMB to be paid to other family members. Also, if any family members are entitled to more than one type of benefit (i.e. SSDI and DAC, or retirement and spousal), which is referred to as dual entitlement, their combined payment amount is limited to their share of the CFMB even if the full CFMB isn't being paid.
Here's an example to illustrate, let's say Bob & Barb are a married couple born in the same month and both file for their Social Security retirement benefits at age 62. Bob's primary insurance amount (PIA), which is equal to the amount he'd receive if he waited until FRA to start drawing, is $800. The FMB on Bob's account is $1200. Barb's PIA is $2000, and the FMB on her account is $3500. Bob and Barb's disabled adult child, Bill, is drawing a monthly SSDI benefit of $500, and Supplemental Security Income (SSI) of $300.
When Bob and Barb apply for their benefits Bill is determined to be eligible for DAC benefits on both accounts, which allows Bob's and Barb's FMBs to be combined. The resulting CFMB is $4700 (i.e. $3500 + $1200). Bill can only actually be paid DAC benefits on Barb's account, though, since her PIA is higher than Bob's. Bob is eligible for an excess spousal benefit on Barb's account since his PIA is less than 50% of Barb's PIA. Bob's unreduced excess spousal rate is calculated by subtracting his PIA from 50% of Barb's PIA, which amounts to $200. However, since Bob is applying at age 62 both his own retirement rate and his excess spousal rate are reduced for age. Bob's own retirement benefit rate is reduced for age from $800 to $570, and that amount is paid from Bob's account and is not subject to the CFMB.
The remaining family benefits will be paid on Barb's account. Barb's benefit rate is reduced for age to $1425, but her entire PIA of $2000 is deducted from the CFMB. The remainder of $2700 (i.e. $4700 - $2000) is then potentially available to be paid to eligible family members. DAC benefits are not reduced for age, and they are calculated at 50% of the parent's PIA. So, Bill's unreduced DAC rate is $1000, but what Bill is actually paid is his own SSDI rate of $500 plus an excess DAC benefit of $500. Since Bill's combined Social Security benefits now amount to $1000, his SSI payments stop.
Bob is paid his own reduced rate of $570 plus a reduced spousal rate of $132 for a combined amount of $702. Therefore, the total benefits payable to the family add up to $3127 (i.e. $1425 + $702 + $1000), which is well below the CFMB of $4700.
It sounds like your family has numerous possible options to consider. The benefit calculator included in our software (https://maximizemysocialsecurity.com/purchase) is fully capable of handling all of the various calculations involved is a case such as your, so you should strongly consider using the software to fully analyze all of your options so that you can choose the filing strategy that you feel would best fit your family's needs.
Best, Jerry
