Hey guys, Mike Frontera here with another Retirement Theory video!
So today I’m talking about commonly missed Social Security benefits. And so originally when I set out to record this video, I wanted to cover several different benefits that get missed, and I quickly realized that I was biting off more than I could chew, because there are SO many different benefits that get missed here. So I think what I’ll do is make this a bit of a recurring topic, because it’s too big for one video but it it’s also really important.
As the biggest source of income in retirement for so many people, getting the most out of Social Security can literally make the difference between a secure retirement and one that’s under constant financial stress. So with so much at stake, it pains me how often whole swaths of benefits that get completely missed, both by claimants and by Social Security agents.
So today let’s just walk through one of these lesser-known Social Security benefits that you, or perhaps someone you know, may already be entitled to.
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Alright, now the first benefit I see missed time and time again are children’s benefits. That’s right. Your child may be eligible for Social Security based on your work history. Now the big, huge, can’t overlook caveat here is that you must be receiving Social Security benefits as a retiree, or through Social Security Disability.
Assuming that’s the case, the child eligibility rules are actually fairly basic. Pretty much, your child must either be:
- Younger than 18
- Younger than 19, assuming they’re a full-time high school student
- Any age, if they’re disabled, assuming that disability began before age 22
The amount of benefit by the way, is half of your full retirement age benefit. So not too shabby!
Now, of course with that big caveat that you must also be receiving benefits, this knocks many people out. Mainly because most parents are still younger than 62 when their child reaches 18 years old and thus CAN’T receive benefits on their own record yet.
But this isn’t always the case; especially with people having children later in life these days. And still another common scenario that is often overlooked are stepchildren. Say you get married to someone with children, under the same age-based criteria, those stepchildren can receive benefits on your record, again, assuming you’re receiving benefits yourself. The only other caveat here is that you must have been married for at least one year before applying for benefits for your stepchildren.
In fact, if you’re raising your grandchildren, they may even be eligible for children benefits, though again there are some additional requirements here. Namely, the grandchildren’s parents, so your children, must either be deceased or disabled- OR you must have legally adopted your grandchild with them receiving no financial support from their parents. They must also have been living with you prior to turning 18, you must be providing at least half of their support.
Finally, let’s not miss the “child-in-care” benefit! That’s another benefit that your spouse would be entitled to, assuming your child was instead under 16 years old or disabled. Like the benefit for your child, the amount of the child in care benefit is 50% of your full retirement age benefit.
OK, so that means I could be collecting my own benefit AND have my spouse and my child each receiving 50% of my benefit, all at the same time? Well, kind of. Social Security does have a cap on how much they’ll pay out to any one family, called, appropriate enough, your Family Maximum Benefit. Now it’s a complex formula but basically caps out total benefits to somewhere between 150 – 180% of your full retirement age benefit. It’s also important to mention that both the child’s, as well as the child in care benefit go from 50% of your full retirement age benefit to 75% as survivor benefits. Meaning if you as the one receiving benefits passes away during this time.
Again, you must be claiming your own benefits to be eligible for children’s benefits and child-in-care benefits. These benefits can completely throw off your optimal Social Security claiming age, because you potentially give up more than just your own benefits by delaying. It can serve as a example of how the conventional wisdom of delaying your own claim could actually cost your family a lot of money. Now stay tuned next time, when I’ll walk through other lesser understood benefits, that too, can greatly alter the optimal Social Security claiming strategies.
So, do you have questions for me? Come visit me at www.retirementtheory.com or send me an email at firstname.lastname@example.org. Did you click subscribe on this video or follow me on Facebook? I think that you should. You’ll continue to see videos like these on everything retirement planning. Once again, thank you for joining me, we’ll see you next time.