Dear Liz: I will be 65 next year and have an 8-year-old son. I have been told by various people that I can receive an extra Social Security allowance for him until he is 18. These same people also said it would reduce my benefit permanently. Is that correct?
Answer: Yes, plus your benefit would be subject to the Social Security earnings test if you continue to work. The earnings test applies when you start Social Security before your full retirement age, which is 66 and 2 months, and could temporarily reduce or even eliminate your benefit.
The earnings test disappears at full retirement age, which is why it’s usually good to wait until then to apply if you continue to work. Most people benefit from delaying the start of Social Security even longer, but your situation may be one of the exceptions because the child benefit can be a valuable, if temporary, addition to the family finances.
A child can receive up to half the parent’s full retirement benefit, typically until the child turns 18. (Benefits can continue as late as age 19 if the child is still in high school.) The parent must apply for his or her own benefit to trigger a child benefit. Also, there’s a limit to how much a family can receive based on one worker’s earnings record. This family maximum varies but can be from 150% to 180% of the parent’s full benefit amount.
Free Social Security claiming calculators typically aren’t set up to handle the possibility of child benefits, so you may want to use one of the paid versions such as Maximize My Social Security or Social Security Solutions to determine your best course.
From a previous column: “If you’re still working and your children will be younger than 18 by the time you reach full retirement age, it may make sense to wait until then to apply. To know for sure, though, you should use one of the calculators that takes child benefits into account, such as MaximizeMySocialSecurity.com.”
I don’t think your answer “Yes” is correct. Could you check that? What is the difference between spousal or child? Spousal benefits do not permanently reduce your own benefits so why should child benefits?
When you apply for benefits before your own full retirement age, your benefit is permanently reduced to reflect the early start. Your benefits will increase by inflation and you can suspend them at full retirement age to earn delayed retirement credits, but you won’t get as much as you would have had you waited. If you start benefits early so you can trigger a spousal benefit, the same math applies: you get a reduced benefit. (Also, people who apply for spousal benefits before their own full retirement ages also get a reduced amount.) You can use this calculator to see how earlier vs. later starts can affect your benefits: https://www.ssa.gov/OACT/quickcalc/early_late.html