Confused on SS "file & suspend"- have 3 minor

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Confused on SS "file & suspend"- have 3 minor

Postby annetteski » Sun Nov 21, 2010 2:12 pm

Thanks for all the great information in these forums. I've been lurking a while, but now want to introduce myself and seek some input/help.

I am 48 and my husband is 61.5. We have three young (biological) kids, twins aged 7 and a son who is 9. Husband has paid in what is neccessary to get the maximum monthly SS payment for age he retires at.

We never imagined that we would be focused on SS (previously prosperous!), but (like many folks) we've had a series of bad luck events the last few years and we are now very focused on SS and retirement.

We are trying to find out if-- even for reduced benefits-- my husband can file at 62 and suspend so that our kids can get a little something each the next several years. Or would my husband need to file early at 62 and go ahead and collect in order for our children to get benefits the next 8-10 years (i.e., before he turns 66 -- it is pretty clear that he can file and suspend at 66 at which time our children can collect on his record until they are 18, but it is not clear if anything can be done on their behalf BEFORE he turns 66).

We own a business (S-Corp) and both work in it. We didn't pay attention to whom the paychecks were going the last several years... in retrospect we should've been paying ME so that I could get the top amounts when I retire, but that won't be the case now-- my record shows many years "off" and I will not get highest amounts.

Thanks in advance for any light that anyone can shed! There is very little info out there about SS, retirement on SS and minor children still at home.
--Annetteski
annetteski
 
Posts: 1
Joined: Sun Nov 21, 2010 8:15 am

Re: Confused on SS "file & suspend"- have 3 mi

Postby Penguin » Sun Nov 21, 2010 3:39 pm

annetteski wrote:Thanks for all the great information in these forums. I've been lurking a while, but now want to introduce myself and seek some input/help.

I am 48 and my husband is 61.5. We have three young (biological) kids, twins aged 7 and a son who is 9. Husband has paid in what is neccessary to get the maximum monthly SS payment for age he retires at.

We never imagined that we would be focused on SS (previously prosperous!), but (like many folks) we've had a series of bad luck events the last few years and we are now very focused on SS and retirement.

We are trying to find out if-- even for reduced benefits-- my husband can file at 62 and suspend so that our kids can get a little something each the next several years. Or would my husband need to file early at 62 and go ahead and collect in order for our children to get benefits the next 8-10 years (i.e., before he turns 66 -- it is pretty clear that he can file and suspend at 66 at which time our children can collect on his record until they are 18, but it is not clear if anything can be done on their behalf BEFORE he turns 66).

We own a business (S-Corp) and both work in it. We didn't pay attention to whom the paychecks were going the last several years... in retrospect we should've been paying ME so that I could get the top amounts when I retire, but that won't be the case now-- my record shows many years "off" and I will not get highest amounts.

Thanks in advance for any light that anyone can shed! There is very little info out there about SS, retirement on SS and minor children still at home.
--Annetteski

Your answers are mostly here:
http://www.ssa.gov/pubs/10085.html
Your husband can file at age 62 and then he and your three children may be entitled to benefits. His benefits will be reduced because he is claiming before full retirement age, however, he may suspend his benefits at age 66 if he wishes and start collecting delayed retirement credits until age 70. All the benefits may be reduced if your husband has earned income of more than about $14,160 per year before age 66.
Each month that you delay claiming benefits for your 3 children will be a loss of approximately your husband's primary income amount (the amount he would be entitled to at age 66) divided by 2 multiplied by the three of them (PIA x 3/2). I suspect this is the maximum social security benefit your family may collect.
Jon
Penguin
 
Posts: 437
Joined: Sat Mar 03, 2007 1:52 pm

Postby sscritic » Sun Nov 21, 2010 9:18 pm

Penguin has all the main points covered.

1) he can't suspend until FRA (66 for someone 61 today).
2) if he is working (and is not yet FRA), the earnings test will apply to all four of them.
(a) Deductions because of insured individual's earnings. Under the annual earnings test, we will reduce your monthly benefits (except disability insurance benefits based on the beneficiary's disability) by the amount of your excess earnings (as described in §404.434), for each month in a taxable year (calendar year or fiscal year) in which you are under full retirement age (as defined in §404.409(a)).

(b) Deductions from husband's, wife's, and child's benefits because of excess earnings of the insured individual. We will reduce husband's, wife's, and child's insurance benefits payable (or deemed payable—see §404.420) on the insured individual's earnings record because of the excess earnings of the insured individual.
http://www.socialsecurity.gov/OP_Home/c ... 4-0415.htm

3) if he isn't working and all four are collecting benefits, the total will be limited by the family maximum. You can see the family maximum on his annual statement.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am


Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: A-Commoner, DFrank, jjg247, novicemoney, UnrealizedGains and 57 guests