Social Security offers more than just retirement benefits to workers who have paid into the system for at least 10 years. In certain situations, family members may also be entitled to benefits off that same worker’s record.
To complicate matters further—but to reinforce Social Security’s value beyond the straight payment of retirement benefits—those same family members may also be entitled to benefits on their own, or even another worker’s, work record.
Sorting it all out is becoming a niche expertise in the world of Savvy Social Security Planning.
Working through an example
Let’s take the example of David and Brittany. David, age 62, is on his second marriage, to Brittany, age 40. They have two children, Jason age 11, and Julie age 7. Once David retires and claims his Social Security benefit, his wife and two children become entitled to dependent benefits off his record. As David’s children, Jason and Julie would each be entitled to 50% of David’s primary insurance amount (i.e., his full retirement age (FRA) amount) until they turn 18 (or graduate from high school if later), and as a caregiver to the children, Brittany would also be entitled to 50% of David’s primary insurance amount (PIA) until the youngest child turns 16.
However, there is a maximum amount that can be paid off one worker’s record. This is usually about 180% of the worker’s PIA. (The family maximum is shown on the client’s Social Security statement; see this POMS reference for the exact calculation.)
A key question David might ask you is whether he should go ahead and file for his retirement benefit now, at 62, so he can get benefits for Brittany and the kids, even though it means locking in a reduced retirement benefit for himself.
The first question you would ask David is whether or not he is still working. If so (and what parent of school-age children wouldn’t need to work?), there is probably no point in filing for benefits now, while he is under full retirement age, because all or most of his benefit, as well as all the dependent benefits, would be withheld for the earnings test. One dollar in each family member’s benefits would be withheld for every $2 David earns over the exempt amount, which is $22,320 in 2024.
But let’s say David is truly able to stop working and even though he doesn’t necessarily need the Social Security income, thinks it might be prudent to go ahead and file for his benefit in order to get as much as he can for the family members. After all, if he waits until age 70 to claim, Jason will be over 18 and unable to receive his benefit, and Julie will be nearly 16, the age at which Brittany would no longer be able to receive a child-in-care benefit.
Use a tool to help
With all these benefits in play, it would be nearly impossible to answer David’s claiming question without specially programmed software. The software would figure David’s benefit amount if he claims at the various ages (62 through 70) and also figure each dependent’s benefit for each of David’s possible claiming ages, incorporating the family maximum.
Then it would calculate lifetime benefits for each claiming scenario, taking into account cost-of-living adjustments and life expectancies for David and Brittany. It would also figure in the cessation of each dependent benefit when they age out, as well as Brittany’s transition to her survivor benefit after David dies.
If you were to enter David’s case into Horsesmouth’s new Savvy Social Security Planning software you would be able to see at a glance which claiming scenario would pay David’s family the most Social Security benefits.
Click the image to view a larger version.
As you can see, it actually makes more sense for David to delay his benefit even though it means giving up some dependent benefits. The reason is that if he delays, his higher benefit will continue through Brittany’s much longer life expectancy.
This is just one example of family benefits. There are others. See this chart to determine which benefits may be available.
Family benefits: Questions to ask all clients and prospects
| Question |
May be entitled to a |
| Are you currently married? |
Spousal benefit |
| Have you ever been divorced? |
Divorced-spouse benefit |
| Have you ever been widowed? |
Survivor benefit |
| If divorced, is ex now deceased? |
Divorced-spouse survivor benefit |
| Do you have minor children? Or an adult disabled child? |
Children’s benefits |
| Do you have a spouse at home caring for children? |
Child-in-care benefit |
| Are you unable to work due to a disability? |
Disability benefit |
When family benefits are involved, the Social Security claiming question becomes much more complex and far less intuitive. You may use the Savvy Social Security Planning software to help your clients—whether they be single, married, divorced, or widowed, and whether or not they have children—to determine the best strategy for maximizing Social Security.