I am a federal employee under the Federal Employees Retirement System (FERS). FERS is a 3 tiered system consisting of a Pension, a 401K, and Social Security (SS). My situation is this. If I retire at age 62 my estimated SS benefit is $1700/mo. My estimated full retirement benefit (FRB) at age 66 and 8 months is $2400. I also have a daughter who will turn 13 one month after my 62nd birthday and my wife will be 58 at the time of my 62nd birthday. I have read the existing rules on benefits for minor children and the spouse who will care for them and have come up with some numbers but I want to be sure I am correct with them and thus the reason for my writing. Assuming the rules don't change, my estimates are that if I retire at 62 my daughter who will be almost 13 can collect half of my FRB ($1200) each month until she is either 18 or 19 if still in high school. My wife can also collect half of my FRB ($1200) until my daughter turns 16. If my calculations are correct, if I don't retire at 62, our family would stand to loose $2400/mo in benefits until such time that I do retire. $2400 is less than 150% of my estimated benefit at 62, the extra benefits are under the cutoff at 150%. Benefits would drop by $1200 once my daughter turns 16 and my wife no longer receives a benefit for child care and then drop by $1200 again once my daughter turns 18 or 19 depending on high school. Is that correct? Thanks.

Hi,

Your wife and daughter couldn't both receive a full half of your full retirement age rate, which is referred to as your primary insurance amount (PIA), due to the family maximum. If your PIA is $2400, your family maximum benefit(FMB) would likely be roughly $4200, and your wife and child would then get equal shares of the $1800 that your FMB exceeds your PIA. Even if you start drawing your benefits at age 62 at a reduced rate of $1700, that would not free up more FMB benefits to be split among your eligible family members.

Furthermore, if you continue working after age 62 all of the benefits payable on your record, family benefits included, could be subject to full or partial withholding due to the Social Security earnings test (https://www.ssa.gov/planners/retire/whileworking.html). In 2018, for example, $1 of the benefits payable on a person's record who is under full retirement age (FRA) is withheld for each $2 that the worker earns in excess of $17040.

You're correct that, unless your daughter is disabled, your wife would no longer qualify for child in care spousal benefits when your daughter turns age 16. So, unless your wife qualifies for regular spousal benefits your daughter could then receive a full 50% of your PIA for as long as her eligibility continues, which would likely be until she turns age 18 or graduates from high school.

You should strongly consider using our software to explore and compare your various options so that you can choose the best possible filing strategy for your family. When to start drawing your benefits is a critical decision, and you wouldn't want to make a mistake due to a misunderstanding of the rules.

Best, Jerry