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Social Security - Dependent Benefits Example

Alan, age 65, and Susan, age 46, are married and have two kids - ages 13 and 11. Alan still works and wants to retire soon. The family's income will decline once Alan does retire. His primary insurance amount (PIA) at his Full Retirement Age of 67 is $2,000 monthly. He will receive a nice pension from his company but would like the added Social Security income even though he knows early filing will reduce his benefit payments.


Q: Can the two kids file for dependent benefits once Alan begins collecting benefits? If so, how much?

To be eligible for Social Security benefits, a child must be unmarried and under 18 or 19 if still a full-time high school student. Disabled adults over 18 are also eligible for benefits as long as the total disability began before 22. The child can be a client's natural child, legally adopted child, stepchild, and, in some cases, a grandchild if the child's par­ents are deceased or disabled and the child is your dependent.

Q: What amount will the dependent(s) receive?

The child's benefit is based on 50% of the parent's primary insurance amount at full retirement age. Even if Alan files for reduced-retirement benefits early or larger benefits by delaying his full retirement age, the child's benefit is still based on half of Alan's primary insurance amount.

Q: Must Alan receive benefits before his kids file for dependent benefits?

Yes. This creates a dilemma for the retiring father – does he hold off on receiving benefits so his retirement amount grows, or does he file early and trigger dependent benefits for his children (and possibly his spouse) by commencing benefits for himself?

Q: Is Susan eligible for dependent benefits also?

Yes. Regardless of her age, if she is caring for the worker's dependent children, she is entitled to dependent benefits as well. The ability for Susan to receive dependent benefits in the future will not impact her retirement benefit. 

Q: Is there a maximum benefit that a family can receive from one worker's earnings record?

Yes. But the total amount paid on a worker's record is capped at the family maximum, between 150% and 180% of a worker's full retirement benefit. If total family benefits exceed the prescribed family maximum, each de­pendent's benefit is reduced proportionately, but the worker's benefit is unaffected.

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