When I file, I believe my disabled adult child, who now receives SSI, will be entitled to receive 50% of my PIA based on my record. I believe she will receive SSDI. My wife will also be entitled to receive SS under my record but she will be taking care of my disabled child. Under these conditions, will my wife also be entitled to 50% of my PIA as long as the total of my, my child and my wife's SS amount doesn't exceed my family limit? My wife will be 63 and I will be 62 when I plan to file. Thank you.
Not exactly. If you file for benefits prior to full retirement age (FRA), the dollar amount of the reduction applied to your benefit rate is not made available to pay your family members.
For example, say John files for his Social Security retirement benefits this year at age 62. John's primary insurance amount (PIA), which is equal to the monthly amount he would receive if he waited until FRA to start drawing, is $2000, but John receives a reduced benefit rate of $1450. John has an adult child who qualifies for childhood disability benefits (CDB) on John's record, and a spouse who qualifies for child in care spousal benefits. The benefit rate for John's family members would normally be equal to 50% of his PIA, but there is a family maximum benefit (FMB) limit that can be paid on any worker's record. The FMB limit on John's record is $3500, and in order to determine the amount available for family members John's PIA is subtracted from the FMB. In this case, that leaves up to $1500 (i.e. $3500 - $2000) that can paid to John's wife and child. So, instead of getting their full half of John's PIA, John's wife and child would be limited to benefit rates of $750 each (i.e. $1500/2).
Thus, in the example above, John and his family would receive total benefits of $2950 ($1450 + $750 + $750), not his full FMB of $3500. The difference is equal to the reduction for age applied to John's benefit rate in return for starting to draw his benefits early.
Furthermore, in your case if your daughter is eligible for Supplemental Security Income (SSI) benefits, those benefits will be offset dollar for dollar by the amount of any CDB benefits she receives on your record. And, keep in mind that starting to draw your benefits early could limit the benefit rate that your wife could potentially receive as a widow on your record if you die before her. Before you decide what to do, you should strongly consider using our software to explore and compare all of your options so that you can choose the best possible filing strategy for your family.