Hi, Larry,

I will be 65 years old soon and my wife will be 59 and wee have a disabled child since birth, he is 25 and receives SSI. My PIA is much higher than my wife. If I decide to file for SS at age 65 and file for my wife as child in care person, the maximum family benefit will be applied on my record. I wonder what happen when my wife reach a retirement age and she wants to apply on her record?
Thank you in advance.
..Said

Hi Said,

Your wife couldn't be paid any more than the higher of her own benefit rate or her spousal rate, and if your wife starts drawing her own benefits prior to full retirement age (FRA) her benefit rate will always be reduced for age. However, if and when your wife files for her own Social Security retirement benefits the family maximum benefit (FMB) amount on her record can be combined with your FMB. That would potentially allow more total monthly benefits to be payable to your family.

I’ll give you an example to illustrate. Let’s say Bob was born in 1955 and decides to file for his Social Security benefits starting at age 65. Bob’s primary insurance amount (PIA) is $2000, which is what he would receive if he started drawing at FRA, but his reduced monthly rate is $1844. Bob has a younger wife, Jan, and a disabled child who qualify for auxiliary benefits on his account. The FMB on Bob’s record is $3500, which after subtracting Bob’s PIA of $2000 leaves up to $1500 to be paid to eligible family members. The normal amount that could be paid to Jan and their child would be half of Bob's PIA, or $1000 each, but their benefit rates are limited to $750 each due to the FMB (i.e. ($3500 - $2000)/2).

When Jan reaches age 62, she files for her own Social Security retirement benefits. Jan’s PIA is $500, but her reduced age 62 rate is $352. Since this couple’s child now qualifies for benefits on both of his parents’ records, Jan’s FMB of $750 can be combined with Bob’s FMB in order to potentially allow more benefits to be payable to the family. However, the child can only be paid from the higher parent’s record, not both. The $750 from Jan’s record added to the $3500 from Bob’s account provides up to $2250 (i.e. $3500 + 750 - $2000) to be paid to family members eligible for benefits on Bob’s account. That would allow both Jan and their child to be paid up to their full rates of $1000 without exceeding the FMB. However, since Jan is now entitled to both her own benefits and spousal benefits, her unreduced spousal rate is reduced to the difference between her own PIA and 50% of Bob’s PIA. In Jan’s case, that results in a child in care spousal rate of $500 (i.e. $2000/2 - $500), which would then be paid to Jan in addition to her reduced retirement rate of $352 for a combined rate of $852. Thus, after Jan files for her benefits, total family benefits would amount to $3696 (i.e. $1844 + $852 + $1000).

I should also note that if you start drawing your benefits prior to FRA both your benefits and the auxiliary benefits payable to your wife and child could be subject to full or partial withholding until you reach FRA if you're still working and if you earn too much (https://www.ssa.gov/benefits/retirement/planner/whileworking.html). Furthermore, if you end up dying before your wife, her survivor benefit rate would be limited to no more than the monthly rate to which you were entitled. Thus, by starting to draw your benefits early you would not only be receiving a reduced rate yourself, but you'd also be limiting the survivor rate that your wife could potentially end up receiving. Also, if and when your son starts drawing disabled adult child's (DAC) benefits, those benefits will offset his SSI benefits roughly dollar for dollar. That means that if your son's DAC benefit rate is at least $20 higher than his SSI rate, his SSI payments will stop completely.

Your best filing strategy depends on a number of different factors, so you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze the options available to you and your family in order to determine the best strategy for maximizing your benefits.

Best, Jerry