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Saturday, October 22, 2016

Maximum Payout Impacts Benefits To A Retiree’s Family

Q: I am 67 years old. I took my Social Security at age 66. I have a 17-year-old son, a 14-year-old daughter and a 57-year-old wife. All three of them are getting benefits as dependents on my account. The Social Security office told me that my kids will keep getting checks until age 19. And my wife will get Social Security until the youngest one turns 19. But by then, she will be 62, so she will be able to get regular wife’s benefits at that point. They also said the total amount we are getting now will never change. Is all of that true?

A: No, it’s not true. You either misunderstood what the Social Security people were telling you or got some bum advice. I’m going to assume the former because the rules involving benefits paid to a family can get quite messy and are not easy to follow. But I will try to explain it as simply as possible.

I’ll start with a couple of basic Social Security principles. As someone who has worked and paid taxes, you obviously are due your retirement benefit. Your children qualify for benefits until they reach age 18 (not 19). If they are still in high school on their 18th birthday, their benefits can continue until they graduate or turn 19, whichever comes first.

Your wife qualifies for what are known as “mother’s benefits” until the youngest child turns 16. Based on what you told me, she will be 59 when that happens. At that point, her mother’s benefits will stop. But when she turns 62, she then can file for regular dependent wife’s benefits on your record.

Now let’s look at how everyone’s benefits will play out as the years go along. You didn’t tell me what you are getting. So to help explain, let’s say your full age 66 retirement benefit is $2,000 per month.

Yours is the easy one. You waited until 66 to take your Social Security. So you should be getting your full retirement benefit of $2,000 per month. You will get that for the rest of your life (with annual cost-of-living increases, of course).

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