Turn on Social Security at 62 and Your Minor Children Can Collect The Dependent Benefit
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- čas přidán 7. 08. 2024
- Not many people realize that if you are age 62 or older and have children under the age of 18, your children are eligible to receive social security payments based on your earnings history, and it’s big money. However, social security does not advertise this little know benefit, so you have to know how to apply, the rules, and tax implications. In this article, I will walk you through the following:
• The age limit for your children to be eligible to receive SS benefits
• The amount of the payments to your kids
• The family maximum benefit calculation
• How the benefits are taxed to your children
• How to apply for the social security dependent benefits
• Pitfall: You may have to give the money back to social security…..
Contact Michael Ruger with Questions: 518-477-6686 or mruger@greenbushfinancial.com
Visit our website: www.greenbushfinancial.com/
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#socialsecurity #retirement #greenbushfinancial
CLARIFICATION IN FAMILY MAXIMUM BENEFIT CALCULATION: In this video, we reference the Family Maximum Benefit calculation at 4:16 in the video. There is an important item that I want to clarify about the calculation of the family Max. When you calculate the Family Maximum Benefit amount, you always use your Full Retirement Age Benefit in the calculation regardless of when you actually filed for social security benefits.
If you file for social security benefits early at age 62, instead of using the reduced 62 age benefit of $1,200 social security benefit to calculate the remaining amount available for your children, you have to use the FRA benefit of $1,700 in the formula before determining how much your children are eligible to receive.
Social security would reduce the children’s benefits by an equal amount until their total benefit is reduced to the family maximum limit.
These are the steps:
1) Max Family Benefit = $1,700 (FRA) x 150% = $2,550
2) $2,550 (Family Max) - $1,700 (FRA) = $850
3) Divide $850 by 4 eligible children = $212.50 for each child
This results in the following social security benefits paid to retiree and their 4 children:
You: $1,200
Child 1: $212.50
Child 2: $212.50
Child 3: $212.50
Child 4: $212.50
We have a article on this topic the provides a detailed illustration of the calculation: www.greenbushfinancial.com/al...
Sweet! My daughter was born when I was 50, so I can start collecting a 30% reduced SS when I’m 62, she’ll be 12 and can collect for 6 years until she’s 18. We can invest the funds and use it to pay for her college or to buy a house. I guess there are some benefits to being an old dad!
I'm in exactly the same boat as you. I am debating 62 vs 64. I am leaning towards 62 if other things line up. I am just trying to figure out from my bank how to open an account solely owned by my daughter where I am just the custodian. Might be harder then what people think. Trying to sort that out now. My bank says that she can open a joint account might not fly. Not going to do an UTMA. Hopefully I can open an account in her name as owner. We'll see.
If you’re under full retirement age and working, and making more than 22,300 /year then they will ding you - remove one dollar of your benefits for every two dollars you go over this (you can earn up to 1850/ month w/out getting your benefits reduced)
Best information I have found to date on this topic. Great video. It doesn't answer all of my questions, but did address a couple of big ones.
Very good Michael, concise, specific and very infomative.
Great presentation! Thank you very much.
thank you so much for all the information!
You went on about what kind of account to put the childs money into but it all comes in one payment to the retired person. "If a child is a minor, their Social Security benefits will be issued in the name of the representative payee." It goes into the same bucket, as you said it is additional income meant to subsidize the expenses until the kid reaches age of majority.
thank you, well done
Excellent video thanks
I am 55 with a 4 year old. I am looking at retiring when I am 64 and start drawing SS. My daughter will be 13. I'll have her start drawing SS based on my FRA (so over the 6 years that's going to be a substantial amount). I understand that the monies she receives has to be put into an account "owned" by her (and I can be custodian) So that we don't get a letter when she's 18 or 19 that we owe any unspent money back to the IRS. I asked my bank if I can open such an account and they basically said no. I will always be listed as a owner along with my daughter.
Here is what they said:
"Your daughter would need to have a parent or legal guardian on the account with her. She can be listed as the Tax Reported Owner and you could be listed as second on the account, however, you would still be considered an owner of the account"
So, if my daughter would be considered the "tax reported owner" but I am still a co-owner, would that satisfy the IRS rules so that we don't have to pay any monies back (as long as I don't get the 1099-DIV)
Hope that makes sense.
I am NOT going to be opening a UTMA or UGMA account.
Thanks
Mark
PS has anyone every done this? Have their child draw SS before the age of 18 (or 19 if still in high school)? What kind of account were you able to get so that the IRS doesn't ask for any unspent monies to be returned.
I did that… a definite blessing.
I had also heard something about this but dismissed it as hearsay! I have several questions, but my first thought is, SS is going to mail my 14 kid $600 a month until age 18?? Can a minor have a bank account, but moreover be trusted with that kind of dough piling up? Can the check go to the parent, instead? I've looked high and low for details on this.
As I understand this, if you have a disabled child (as defined in the story), your child will also get Medicare two years after they claim. So that can be another bonus…
What if I intend to spend childrens benefits and not save them, do I still need to open a child account for each of my 3 children and I am a custodian only? I don't intend to save their benefits.
Very informative video - thank you! I do have one question. I am in my 50s, my ex-husband is 67 and turned on his SS. We have two minor children and he pays me court ordered child support. Will he be in charge of the children's benefits since they are coming from his SS or would I?
Does anyone know if this counts for my grandchildren who I've adopted?
CLARIFICATION IN FAMILY MAXIMUM BENEFIT CALCULATION: In this video, we reference the Family Maximum Benefit calculation at 4:16 in the video. There is an important item that I want to clarify about the calculation of the family Max. When you calculate the Family Maximum Benefit amount, you always use your Full Retirement Age Benefit in the calculation regardless of when you actually filed for social security benefits.
If you file for social security benefits early at age 62, instead of using the reduced 62 age benefit of $1,200 social security benefit to calculate the remaining amount available for your children, you have to use the FRA benefit of $1,700 in the formula before determining how much your children are eligible to receive.
Social security would reduce the children’s benefits by an equal amount until their total benefit is reduced to the family maximum limit.
These are the steps:
1) Max Family Benefit = $1,700 (FRA) x 150% = $2,550
2) $2,550 (Family Max) - $1,700 (FRA) = $850
3) Divide $850 by 4 eligible children = $212.50 for each child
This results in the following social security benefits paid to retiree and their 4 children:
You: $1,200
Child 1: $212.50
Child 2: $212.50
Child 3: $212.50
Child 4: $212.50
We have a article on this topic the provides a detailed illustration of the calculation: www.greenbushfinancial.com/all-blogs/social-security-dependent-benefit-minor-child (Comment is for education. Not advice)
Also to calculate how much minor children receive - the calculation is FMB - PIA and that amount is split between the minor children. General calculation will be 50% of PIA at full retirement age. Example: if at age 62 with 2 minor children -- early retirement is $1000 and 67 would be $1250 and FMB would be $1875. The calculation is $1875 minus $1250 = $625. Each child will get 1/2 of the $625. The total benefit will be $1625 ....NOT....$1875. The SSA publication is not clear on this but this is the correct way to calculate it. MFB-PIA ... that is the maximum that can go to minors. Your blog on this and video is not correct in how it is calculated.
I have a question what if you transfer all the save money to your kid’s own account will that help not returning the money to social security?please answer thank you
Should I deposit my minor's social security benefits directly into an UTMA account? Code 416.645 says conserved funds should be deposited into an account insured under federal or state law. If I open an UTMA account at Vanguard and buy insured CDs, does that qualify?
So i just got off of interview with social security. My wife past away at 42 years old. I was told my kids get 1407 each a month and since i am out of work i can collect the same and I am only 50. So thats over 4k a month. Does this sound right?
How do they apply or calculate the 150-188%, and where can I find the law on this?
Thanks
My dad has a child in mexico. Will she be able to get the payments?
what happened if Social Security is paying my disabled ex and my son but Im the one is taking care of my son not him?
what if you buy assets like gold or silver, could they still ask for the money back?
Why is it that I feel I am getting financial advice from Bobby Cannavale 🙂🙂
I have a question how long does the parents must be on THE JOB FOR THE CHILD TO COLLECT.
I DO KNOW
If the parents never worked the child gets nothing cause the parents never paid Into it.
Can I have child dependent ss benefits deposited to my own personal bank account for me to subsidize my childrens expenses and prevent ssa from asking it back when they turn 18?
What if you get a new job at 72 that makes much more money. Both kids were receiving SS benefits, but they stopped about a year ago. Would I get refunded the amount they did not receive?
Actually, i 'm living in Brazil , but I lived in London for 15 years and I I'm intitled for 15 worked years. My question is: at the age of 62, hom much money, i Will receive if i get retirement now? And , also, how I can receive this money in Brazil?
I’m a ChFC for longer, since I’m about 20 years older, I didn’t know about this either. I found out because I had heard that the reason this exists came from politicians negotiating w/Unions for fire fighters & police. The fire department tells the men to marry younger women and retire after 20 years and clean up on this benefit. I’ve heard it’s really fraudulent and I could understand why I’ve heard that
Hello sir what if my ex husband 62 years old who is already collected social have lost custody of 16 years old daughter to me (mother) the benefit is still on? My daughter still got the benefit?
How can I find out how to approach this unique situation? Thank you!
Please feel free to call me at my office for a complementary consult to discuss: 518-477-6686
So, listening again to your explanation of titling the account in the child's name, how does that stop SSA from getting the money if there is anything left at age 18? Unless, they ask specifically in their latter to the parent for any saved money in the parents name? How does the work around not qualify the SSA from demanding any remaining dollars for the child's account? Where did you get that information? On the SSA site? Thanks...
This is one of my big questions. This and how the money can be used.
@leewitte4700 Im planning on, when i get closer to fuling SS, ill go to the SS office to talk to them on what the money can be spent on, to benefit the child and portions of the household expenses that can to split with the child costs.
We are legal guardians/grandparents raising grandchildren would they qualify for these benefits?
No, you have to adopt them to receive these ss benefits. Check with your states DHHR to apply for kinship care benefits.
What if my daughter doesn't live with me?
I am 62 years old and I began receiving benefits Feb 2024. I reside now in the Philippines. I applied for benefits for my spouse and 2 stepchildren at the same time when i applied for my benefits. I had to complete many forms and provide lots of documentation, as well as have my wife set up separate joint accounts for each child, and one of her own to receive benefits. Because i processed my request through the US embassy in the Philippines, it takes several months to get an answer. I should know by the end of the year whether all benefits have been approved. If yes, benefits will be paid retroactively to February. I will post back once i have an answer.
I have a question can parent adult child get their social security even though they passed away 11 or 12 yrs ago
Once a child is over the age of 18, there are no other survivor benefits available to a child based on the deceased parent’s earnings history. (Education. Not advice)
If I am divorced and my ex is raising my minor child and I turn on my social security at 62, does my child still get the money, even if he lives with his mother in Canada?
It is possible that your child would be eligible to receive the SS dependent benefit. Divorce does not preclude a child from receiving a dependent SS benefit. Last I checked, you did not have to be living in the US to receive a SS benefit either, if you are eligible you are eligible. (Comment is for education. Not advice)
Sir can you answer me please my ex receive money for my underage son. My marriage last 3 years. Am i entitled for half of my son ss money???? Thanks
The spousal benefit is separate from the Dependent benefit. The spousal benefit is only available if the marriage lasted over 10 years, you did not remarry prior to age 60, and you are age 62+. (Comment is for education. Not advice)
I have a question I don't know if you could help me out through CZcams My question is if I have somebody that's using my daughter's formation and she's living with her what she got in trouble using my daughter's information with all my permission going on social security
I believe that person would have to be your daughter’s legal guardian to avoid trouble.
Huh, what??
My daughter passed at age 27 , yet ss claims she didn't pay enough quarters for her son(4) and daughter (3) to recieve survivors benefits? This doesn't seem right!?
Social Security requires each individual to earn 40 credits before they are eligible for SS and their dependents eligible for their survivor benefits. You can earn 1 credit for every $1,640 that you make each year up to a maximum of 4 credits if you earn $6,560 or more. For people working full-time for 10 years, they typically reach their full eligibility. If would have to go back through your daughter's earnings history and see if she earned 40 credits which would make her children eligible for the survivor benefits. Here is the full article from the SS website: www.ssa.gov/benefits/retirement/planner/credits.html (Comment is for education. Not advice)
True but if you ADOPT these children and you're retired, they can collect 50% of your ss benefit. It's 50% of your FULL ss benefit, (age67) even if you retired early and are collecting the reduced 70%. Go to your ss office. The kids must be adopted by you to get the ss.
If i file for my SSA benefits as soon as eligible at 62 and I have kids under 18 eligible for up to 75% of my benefit as a family maximum - if I start working again, I know my benefits wife gets reduced $1 for every $2 I earn…but does this also reduce what they can get? Thx.
If you make too much income and face the earned income penalty prior to reaching FRA, it's my understanding that the income penalty is applied against your benefit and anyone else who is claiming a benefit based on your earning history (and the dependent benefit would fall into that category). (education, not advice)
What if your child is 3 or 4 years old can you use the money for raising them . Doctors, food, medicine, school supplies ,cloths , shoes , glasses,
Yes, that is the main purpose of these SS dependent payments (Comment is for education. Not advice)
@@greenbushfinancialgroup thank you I was worried I will have to pay it all back before I pass away
I will be 62 in March. My wife who is 63 and I have 2 minor children. 6 and 4. I plan on taking SS early and take advantage of the family benefit. We are struggling financially and plan on using the money to help with the mortgage payments. Are we legally allowed to do this? Also my wife plans on working till 70 then taking her benefits 9 max benefits). In the event she passes first would I be able to claim her benefits (greater amount than mine) give up mine and also claim the family benefit till my kids turn 18? Thanks
I beleive the kid's money can not be used for your mortgage. You need to open a custodial savings account in their name. Then they can use it for a car or college when they turn 18. Otherwise the Social Security Admin may what the money back when they turn 18.
@@tazrugby Why wouldn’t you be able to use the dependent benefits for family expenses? That’s the point of the benefits and the money spent raising the children through high school will likely be higher than the payments. In fact, if you try to save it, SSA could ask for it back. You should spend the kids benefits as the first contributions to family expenses while they are living at home.
What I have read so far indicates to document all of the dependent spending specifically like a budget or accounting sheet. Anything remaining has to be in some kind of saving/bond to make interest. then when they turn 18, the SSA will expect/demand the unspent money back with interest back. How does having a separate account for the child offset this? I do not see how this can be a work around?
The issue revolved around the ownership of the money that was sent from SS. If the parents deposit that money into their checking account and it is never spent on expenses to benefit the child, did the child ever truly benefit from the receipt of those dependent SS benefits? By depositing the SS benefits into an account, just in the child's name, the child is clearly benefiting, because they are the sole owner of those assets. (Comment is for education. Not advice)
@greenbushfinancialgroup that would be true for future expenses. Im just looking at it from their point of view. From what i have read, the 2 years of documentation for expenses applied to the childs benefit would be for specific costs that have been incurred. Money set asside in the childs name has not been spent, though. If the difference being the owner of the funds, either the parent or child makes the difference, i can see that as a possible loop. I just want to be more informed to what i am going to experience in the future when i do file for my child. My child will have 2 years of benefits by the time she is 18 years of age. Also, from what i understand, the funds are always deposited into the childs bank account, not the parents' account.
If you adopt your wifes child in the Philippines you cant collect anything unless you move back to the usa and adopt the child again and wait five years. I know this it happened to me. Sucks I have been the father six months old and now seven years old. !!!!
but thats only if you adoptvright like if the child is our blood child then no problem right ?
If I start collecting at 62, and work, how does my Earn Income (Penalty) impact my minor child's benefit? Caretaker's wife penalty? If they are reduced too, is that also given back at a later date?
If you take social security benefits before FRA subject to the earned income penalty, the penalty amount can be assessed on any benefit paid based on your earnings history which includes payments to your spouse under the 50% spousal benefit and payments to your children under the dependent benefits. I’m not sure if those penalties are refunded at any point in the future or if it’s just penalties assessed on benefits that you are receiving that are eligible for the benefit recalculation at FRA. (Comment is for education. Not advice)
If you’re under full retirement age and still working, and making more than 22,300 /year then they will ding you - remove one dollar of your benefits for every two dollars you go over this (you can earn up to 1850/ month w/out getting your benefits reduced). I’m not sure if or how this could affect your dependent child or spousal child in care but I think they don’t affect it.
How about my husband he has disability pension but he passed away 4 years ago . Is it possible my son can get survivor pension? We're here in Philippines
If your son is under the age of 18, and your husband was eligible to receive Social Security benefits, he may be entitled to receive the survivor benefit until he reaches age 18. (comment for education not advice)
How does this relate to child support of a minor child? Do they get benefit and child support or does it replace the child support.
I have yet to see child support impacted by the SS dependent benefits but judge rulings can vary on this subject (Comment for education. Not advice) #gfg
No discussion if your spouse is taking care of the kids? They can get benefits too right? Great video
From what I have read, the spouse can also draw up to 50% of the filers FRA if the kids live in the same house, spouse cares for the children full time and does not work. The Maximum Household Benefit still applies.
@@justsmy5677 Was going to say the same, what about the spouse getting it too? Nothing in the SS Admin info on this I read though indicates if the spouse can be working or not, and if ok to work how much can the spouse earn? Also saw something that indicates the spouse if younger (not at 62 or older), their benefit stops early once the child is 16, not at 18 like for the retired 62yr old spouse.
@@CapCityDC - I was wrong about the spouse qualifying only if they (spouse) do not work. The Spouse can work, not sure about a spousal income limit.
In my case I have two kids under 18 yrs old, so we are maxing out the family maximum with just my check and the two kids checks. The SS Admin told us if my wife chose to draw a check it would not affect the amount we get per month, they would simply take the total (both kids checks combined) that the two kids draw and divide it equally (3 ways) between my wife and two kids…so the total family income would be the same.
And the spouse check ends when the kid(s) turn 16 years old.
So we chose to not have spouse draw a check. I did not want spouse to have on record that she has drawn anything, in case the rules change in the future and her having drawn possibly having a negative impact on some future benefit.
Also, SS Admin told me that after my oldest child stops drawing (18 yrs old or graduates from high school, which ever happens last), they will recompute things and my younger child who is still drawing will most likely get an increase in his check.
Also, the family max is 188% of the parent FRA (Full Retirement Amount at age 67). So at age 62 the family can draw 188% of your estimated age 67 (FRA) check!
Cheers
Yes, the spouse taking care of the children can receive the same benefits as the minor children.
Nice video! Concerning the Maximum Family Benefit, what factors impact the Max benefit (150% to 188%)? Is there anything I can do to push that maximum benefit toward 188%. I have two children that will be 17 and 14 years old when I turn 62.
Also in the video it was not real clear when the child stops collecting. You said age 18, but it is really age 18 or when they graduate from high school, whichever occurs LAST.
Thanks!
The Family Maximum percentage is based on what your PIA is. There are Family Max Bend Points that determine the your Family Max percentage. The highest you can get is 188% and in 2023 that that would be at a PIA amount of $2,056. Following are those percentage bend points for 2023. (a) 150 percent of the first $1,425 of the worker's PIA, plus
(b) 272 percent of the worker's PIA over $1,425 through $2,056, plus
(c) 134 percent of the worker's PIA over $2,056 through $2,682, plus
(d) 175 percent of the worker's PIA over $2,682.
Yes, it ends when the child finishes HS or when they turn 19, whichever occurs first.
@@bradk7653 I think the kids benefit ends when they turn 18 or graduate HS, which ever occurs LAST.
Do they pay these benefits if family moves overseas
yes. we live in the Philippines. You have to report at the embassy for your change of address
I am wondering why you did not know about minor children of a parent's benefits. I knew about them and I do not claim to be an expert. You need to speak to protective filing date for when the parent and the minor children applied for the parent and the minor children. SSA routinely drops the ball on minor children protective filing date. ask me how I know