Dear Larry,
Next year, I will retire at 60 with a full pension as a public school teacher. Social Security estimates have me getting about $25,000 if I wait until my full retirement age, but I can assume that it will drop since I will stop working at 60. My wife has been a stay-at-home mother for the last thirty years and will receive about $700 dollars in social security benefits if she files at 66 and 6 months. We also tend an adult Down syndrome son who currently collects $733 SSI each month. Under normal conditions, I know that waiting until full retirement age to file for benefits is best. However, since both my wife and my son should receive 50% of my benefit amount once I file, is it more practical for me to file for SS at 62 so both of their benefits will increase and perhaps compensate for any early filing penalty on my part?
With thanks,
Jim
Hi Jim,
Filing early is something to consider, but there may be some downsides you aren't aware of. For one, there is a family maximum benefit payable on all Social Security records, so your wife and son wouldn't each receive 50% of your full retirement age benefit (PIA). If your PIA is around $2000, the maximum payable to family members would be around $1500, or $750 each for your wife & son. Also, your benefit would be reduced by about 26% in return for starting at age 62, or to around $1475 per month.
Additionally, your son's SSI benefits would be reduced essentially dollar for dollar by the amount of his Social Security child's benefit. Since his SS child's benefit is likely to be higher than his SSI benefit, his SSI payments will likely stop once he becomes eligible for benefits on your record.
So, filing early may not have as much upside as it appears, and comes with a downside of permanently lower monthly benefits for you, and potentially for your wife as a widow if you die first. You may wish to consider running the maximization software available on this website in order to help sort out all of your options and make the best possible choice.
Best, Jerry
