retirement

'Unusual twist' muddies retirement plan

Don TaylorQuestionDear Dr. Don,
I have an unusual twist to the standing question regarding taking Social Security early at age 62 versus waiting to age 66 or later. In my case, I have a minor child who will be 11 years old when I turn 62 and a wife who has never worked -- and who will be 60 at that time.

I understand that I can receive additional payments for the child, plus my wife would qualify for some additional Social Security amount based upon my income. Given these two additional factors, should I wait or collect as soon as possible?
-- Dan Denouement

AnswerDear Dan,
All pretty interesting, and I can see you've thought this through. There is a cap on how much others in your family can receive, based on your work history. So if your wife and son are collecting benefits, the payments may be limited by the cap.

The total depends on your benefit amount and the number of family members who also qualify on your record. It varies, but generally the total amount your family members can receive is about 50 percent to 80 percent of your full retirement benefit. A divorced spouse who qualifies for benefits on your record, however, does not affect the amount of benefits you or your family may receive.

The Social Security Web page, "Benefits for your children," explains how your 11-year-old could receive benefits until age 18 or 19. Your child receiving benefits qualifies your wife to receive benefits, at least until he turns 16. But by then, she would qualify for spousal benefits based on her age. And the Social Security Web page, "Benefits for your spouse," offers this further explanation:

"Even if he or she has never worked under Social Security, your spouse ... who is caring for your child who is also receiving benefits can receive the spouse's benefit no matter what his or her age is.

"Your spouse would receive these benefits until your child reaches age 16. At that time, the child's benefits continue, but your spouse's benefits stop unless he or she is old enough to receive retirement benefits (age 62 or older) or survivors benefits as a widow or widower (age 60)."

The page also points out the following: "Benefits paid to your spouse will not decrease your retirement benefit. In fact, the value of the benefits he or she may receive, added to your own, may help you decide if taking your benefits sooner may be more advantageous."

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