NEVER MIND I found explanation: "Family maximum" social security - what does it mean exactly?

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BuckyBadger
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NEVER MIND I found explanation: "Family maximum" social security - what does it mean exactly?

Post by BuckyBadger » Thu Jul 12, 2018 3:33 pm

I'm trying to think about how feasible our early retirement plan might still be what with a baby on the way and I was considering social security benefits.

Both my husband and I are relatively high earners, and when I go through the calculators we seem to be entitled to fairly substantial benefits even if we stop working before standard retirement age - i.e. between 50 and 55. (We're currently 38.)

The social security calculators seem to give a "family maximum" that is less than the sum of our individual benefits would be. Am I understanding correctly that we would get a family maximum value rather than each of our full benefit amounts? If I'm not understanding that correctly please ignore my next question, which is, does that family maximum go up if you delay benefits? Because if we're going to be capped by that number it doesn't seem to make sense to wait to get more money since we won't be able to take advantage of it anyway.

I can't do the full benefits analysis because my credit is frozen so I'm trying to ballpark the calculators that allow you to fill everything in by hand, so I might be missing some explanation because I'm not getting truly personalized information.

Thanks for any help with my ignorance!

EDIT: I think I finally found a document that actually explained this, and it's NOT what I thought - it's to do with survivor and disability benefits.

So please ignore this post. Sorry to clutter the forum!

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neurosphere
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Re: NEVER MIND I found explanation: "Family maximum" social security - what does it mean exactly?

Post by neurosphere » Thu Jul 12, 2018 5:19 pm

Just a small clarification, prompted by a person who has "extreme" knowledge of social security (aka "sscritic").

For now, realize that the family maximum is the max that a family can claim against ONE record. If there are TWO earners, then there are two distinct family maximums. For example see this conveniently provided example:
Worker age 62. Spouse age 48. Three children, ages 10, 12, and 14. Worker files for old age. Spouse claims as husband or wife (depending).

(c) You are age 62 or older throughout a month and you meet all other conditions of entitlement, or you are the insured's wife or husband and have in your care (as defined in §§ 404.348 through 404.349), throughout a month in which all other conditions of entitlement are met, a child who is entitled to child's benefits on the insured's earnings record and the child is either under age 16 or disabled;

All three children claim as children.

You are entitled to child's benefits on the earnings record of an insured person who is entitled to old-age or disability benefits or who has died if—
(1) You are the insured person's child, based upon a relationship described in §§ 404.355 through 404.359;
(2) You are dependent on the insured, as defined in §§ 404.360 through 404.365;
(3) You apply;
(4) You are unmarried; and
(5) You are under age 18

Thus five people are claiming on the same record, and no one is dead [i.e. no survivor benefits need be invoked]. The family max is the max that a family can claim against one record. It is not about all the records of the number holders in one family (her first thought, adding her old-age to his old-age). Those are two different records in the same family; in that case there would be two family maxes.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

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neurosphere
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Re: NEVER MIND I found explanation: "Family maximum" social security - what does it mean exactly?

Post by neurosphere » Thu Jul 12, 2018 6:20 pm

BuckyBadger wrote:
Thu Jul 12, 2018 3:33 pm

The social security calculators seem to give a "family maximum" that is less than the sum of our individual benefits would be. Am I understanding correctly that we would get a family maximum value rather than each of our full benefit amounts?
Let me also perhaps simplify the issue for you. Let's assume you don't have children who would otherwise are eligible for benefits based on your or your spouse's record. I think that in that case any discussion of "family maximum" is not relevant.

When considering benefits for you, and/or your spouse (i.e. individual +/- spousal benefits), I don't think that any "family maximum" applies.

Disclaimer: I have not previously researched what "family maximum" refers to. Consider me a non-expert lay-person with respect to my observations.

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