If the child’s biological parents are dead or disabled, or if you legally adopted the child, Social Security can pay dependant or survivor payments to the grandchild under certain circumstances.
According to the AARP, if you haven’t claimed benefits yet, you must demonstrate that your grandkid started living with you before age eighteen and that you supplied at least half of their monetary assistance for at least one year before the month in which you became eligible for Social Security disability advantages, according to the organization.
If the child is less than a year old, you must demonstrate that you contributed half of their monetary assistance from the time of their conception. If the parents are still alive, they are unlikely to make frequent monetary assistance to their children’s welfare.
Consider the scenario in which you were previously getting Social Security benefits when you took care of your grandson. According to AARP, in that instance, you must adopt the child to receive benefits based on your earnings history.
For additional information on what documentation you may need to send to Social Security to confirm your grandchild’s eligibility for payments on your record, you can contact them through your online account or by going to your local Social Security office.
The “Children and Families” area of the Social Security website has information on benefit possibilities for children and grandkids.
Because of the epidemic, Social Security offices are now closed to walk-in visitors; however, according to AARP, you may be able to make an in-person visit for a crucial issue if you call ahead of time.
Since the outbreak began over two years ago, practically all government services have been provided solely online, over the phone, or through the postal service.
The Social Security Administration expects to reopen its offices on March 30. According to a story in the New York Times, the Social Security Agency and labor organizations representing the agency’s employees have reached an agreement to reopen more than 1,200 offices.
All You Need To Know Regarding Getting Social Security While Yet Working
Social Security retirement benefits serve as a supplement to personal retirement savings or pensions, providing an additional source of income. Consequently, many “retirees” work part-time or as side occupations to maintain their level of life.
Another consideration is that earning additional income outside of your Social Security benefits may limit the amount of money you get from the program. Here’s a quick rundown of everything you need to know about collecting Social Security benefits while still employed full-time.
Full Retirement Age
If you can hold off on claiming Social Security payments until you reach your full retirement age, you’ll be in luck. Regardless of how much money you make on the side, your Social Security benefits will not be affected.
For people born between 1943 and 1954, the retirement age is 66 years old at their birth. For those born between 1955 and 1959, the full retirement age increases by two months per year until it hits 67 for those born in 1960 or after.
Payout Decrease for Working Before Full Retirement Age
After you’ve started receiving benefits, the Social Security Administration does not preclude you from continuing to work and earn money.
Even if you haven’t achieved full retirement age, it will lower your benefits for some time. To be more specific, the Social Security Administration will lower your benefits by $1 for every $2 in the income you have above the yearly limit. This maximum was $18,960 in the year 2021.
Social Security Dependent Benefits
However, while Social Security is best recognized for the monthly income to retirees, the program also distributes benefits to their dependents in particular circumstances. Spouses, dependent parents, children, and grandkids are all examples of potential beneficiaries.
Depending on their relationship to the retired employee, dependents may be eligible to receive anywhere from 50 percent to 100 percent of the qualified retiree’s benefits.
- Social Security payments may be available to the spouses, children, and other dependents of covered employees, both while they are living and after they pass away.
- For weddings that lasted at least ten years, ex-spouses of retired workers may be eligible for a benefit equivalent to half of the amount received by the retiree.
- Social Security has a maximum family benefit that can be exceeded, and if the family as a whole has over that level, benefits to some dependents may be reduced.
Who Passes as a Social Security Dependent?
The following are examples of dependents who are eligible for Social Security benefits:
- Children or grandkids who are reliant on you
- Parents who are reliant on their children
Dependents of an eligible Social Security beneficiary may receive payments if the individual retires, becomes disabled, or passes away.
The following explains how the program operates based on the type of dependent.
Benefits for the Partners of Retirees
A spousal benefit is available to the partner of a retiree who is currently receiving Social Security benefits. Approximately one-half of the retired spouse’s monthly payout, also known as their insurance amount, is received in this payment (PIA).
A spouse getting spousal benefits should be at least 62 years old, must be caring for a kid younger than 16 years old, or must be receiving Social Security disability payments to be eligible for this benefit.
According to Social Security, to be eligible for the full one-half of your retiring spouse’s PIA, you must have achieved what Social Security refers to as your “normal” or “full” retirement age.
For persons born in 1955, that age is 66 years and two months, and it increases by two months per year of birth till it hits 67 for those born in 1960 or later.
Suppose you choose to take advantage of your benefits before that period. In that case, you will be punished using a calculation identical to that used to calculate the reduced benefits received by workers who retire.
Depending on your earnings record, you may be entitled to receive more from Social Security than you would otherwise receive through your spouse. This is true if you are qualified for the spousal benefit while also receiving your benefit.
If this is the situation, the Social Security Administration will automatically award you the higher benefit amount available.
If you are still employed, your spouse’s benefits may be lowered by your earnings. As previously stated, the income criterion is quite low; in 2021, it will be $18,960 in yearly income or $1,580 per month (increasing to $19,560 in annual income or $1,630 per month in 2022).
You will have your benefits lowered by $1 for every $2 you earn more than the limit if you make more than that amount.
Your benefits will be lowered by $1 for every $3 you make over $50,520 ($51,960 in 2022), up till the month in which you reach full retirement age. This reduction will continue until the month in which you achieve full retirement age. Following that, the penalties are no longer in effect.
This means that in 2021, for example, if you are 64 years old and earn $25,000 in other earnings, your Social Security payments will be lowered by $3,020 for the year.
Benefits for Surviving Partners
If a widow or widower can prove that their late husband earned a certain amount of money, they may be eligible for Survivor benefits.
The continuing spouse should be at least 60 years old or 50 years old if disabled to be eligible for these benefits. To qualify, a handicap must have started before or within seven years after the worker’s death.
Survivor benefits may also be available to a younger widow or widower if they provide care for a child of the deceased worker under the age of 16 or is disabled and getting dependent benefits based on their late parent’s earnings record.
When a spouse dies, a surviving spouse’s benefit is paid out in full to the surviving spouse who has achieved the usual retirement age. For survivors who are at least 60 years old, the payout ranges from 71.5 percent to 99.6 percent of the benefit received by their deceased spouse.
There are some extra alternatives available to the survivor. In this case, a 60-year-old spouse could file for survivor benefits now and then switch to a retirement benefit based on their work history when they reach the age of 62 (or later) if doing so would result in a greater monthly payout.
As an additional benefit, Social Security will pay a one-time lump sum payment of $255 in the event of the death of a spouse if both of the spouses were residing in one residence at the time of the spouse’s death.
Benefits for Divorced Partners
If you are divorced from a retired employee, you may be eligible to receive a sum equal to one-half of your former spouse’s pension income if you were married for at least ten years at the time of the divorce filing.
While the requirements for getting spousal benefits are identical to those mentioned above, there is one significant difference: you can begin receiving payments even before your former spouse has begun receiving benefits from the government.
For those who have not yet achieved their usual retirement age, you must be at least 62 years old, and your divorce must have been finalized for at least two years before applying for early retirement.
People who have had more than one marriage that has lasted at least 10 years do not receive multiple benefit checks or one for each marriage after they get divorced.
Though this may be the case, the Social Security Administration will automatically choose the ex-previous spouse’s marriage to provide the most benefit.
Benefits for Kids and Grandchildren
Suppose a parent is receiving Social Security retirement or disability benefits. In that case, their children may be eligible for a benefit as the survivor of the deceased worker or as the dependent of the remaining parent. Children must fit into one of the following categories:
- Children under the age of 18 (or 19 if they are enrolled as full-time students in elementary or secondary school) and adults who are disabled due to a disability that began before the age of 22
- Benefits paid to a child will not reduce the retirement benefit of a still alive parent. When the value of the child’s benefits is added to the parent’s benefits, the parent may determine whether receiving their benefits earlier is more advantageous.
A dependent kid may be entitled to receive up to half of the benefits received by a parent receiving retirement or disability benefits.
If a parent dies, dependent children can get up to 75 percent of the worker’s benefit, which is calculated as a percentage of the worker’s benefit if they continue working until they retire.
If you are caring for a kid who is also receiving benefits, their benefits may end at a different period than your own.
Consider the situation in which grandchildren become financially dependent on their grandparents due to the loss of their parents or for other reasons.
Depending on which grandparents earned the most money, they may receive benefits based on their earnings record. Great-grandchildren, on the other hand, are not eligible for dependent benefits.
Benefits for Disabled Kids
Children with impairments can qualify for Social Security payments, but the qualifications and application process can be time-consuming.
According to Social Security, the child must be suffering from a psychiatric illness that greatly restricts their activity and is expected to last over one year or result in the death of a child to qualify for benefits.
In addition, the family’s other financial choices for providing healthcare must be limited. When determining eligibility, Social Security considers the family’s total household income, supplementary resources, and other variables, among other things.
If the child and their family meet the requirements, the youngster may be eligible to receive up to half of the parent’s full retirement or disability payment. Upon the worker’s death, a disabled kid may be entitled to receive 75 percent of the worker’s benefit.
A youngster who is 18 years old or older and has a disability that starts no later than 22 is eligible.
It’s important to note that other government programs, such as Medicaid, have provisions to assist children and people with disabilities, assisting families in this circumstance.
Benefits for Dependent Parents
Some parents are legally reliant on a child due to their financial situation or a condition. Parents of a deceased worker who is 62 years or older could receive 82.5 percent of the worker’s benefit for one parent or 75 percent each for two parents if the worker were 62 years or older.
Family Benefit Maximum
Beneficiaries’ benefits to dependents are subject to a monthly retirement and survivor payout limit from Social Security that applies to the entire family. This total value is derived from the worker’s monthly salary and benefits package.
Dependent benefits normally range between 150 percent and 180 percent of the worker’s compensation, with the actual amount paid to each family member varying depending on their circumstances.
The Social Security Administration calculates the maximum family benefit using a complicated formula.
Those who are dependent on disabled workers are subject to a formula that, in most cases, sets the maximum amount at between 100 and 150 percent of the worker’s compensation.
Social Security Mistakes
Whether you rely on Social Security to provide the majority of your retirement income or only a portion of it, you want to ensure that you receive all of the benefits to which you are eligible.
However, because there are so many different ways to claim benefits — especially if you’re married or used to be married — even minor mistakes might end up losing you a lot of money throughout your life.
Knowing which Social Security blunders to avoid will make your retirement more manageable – even if you desire to retire earlier than the average person.
The Mistake: Not Checking Your Earnings Statements
Even if you’re centuries away from filing for Social Security, failing to keep track of your yearly income could be a costly error in the future.
You may not receive the Social Security benefits to which you are entitled if your earnings record is inaccurate. If your earnings record is erroneous, you may not receive the benefits to which you are entitled.
Mistakes can arise for various reasons, including an employer reporting an inaccurate amount of earnings or your wages not showing up because you were married or divorced and your name change was not completed correctly on your tax return.
Solution: Analyze Your Social Security Statement While Working
Check your earnings statement at least once a year to ensure that you are not losing money due to inaccuracies in your records.
Immediately notify the Social Security Administration if you find any inaccuracies and gather proof of your wages to send to them, such as your W-2 or pay stubs. Once the Social Security Administration has confirmed your claim, the agency will make the necessary changes to your record.
You will have a far simpler time proving an error that occurred the previous year if you still have your records on hand, then it will be to prove an error that occurred 10, 20, or more years ago because you will most likely not have a paper trail that goes back that long.
The Mistake: Not Working For A Long Time
To be eligible for Social Security pension payments, you must have worked for at least 40 credits. By your wages, you can receive up to four credits every year.
To get one credit in 2019, you must earn $1,360 or $5,440 to obtain a maximum of four credits.
Additionally, your benefits are computed estimated based on your 35 highest-earning years throughout your working life. If you have less than 35 years of income, $0 will be calculated as an average for each year you do not make any money.
Solution: Know the Math Before Retiring
When you’re getting close to retirement, review your earnings report to ensure you have had enough credits to be eligible for Social Security benefits first.
If you don’t have 35 years of income under your belt, consider whether working an extra year or two could help you qualify for a larger Social Security benefit.
For instance, if you were employed in your first job during which Social Security did not cover you, continuing to work for an additional year or two may enable you to qualify for Social Security benefits or increase the amount of money you receive each month.
The Mistake: Taking Social Security Early
You can begin collecting Social Security payments as soon as you reach the age of 62. In contrast, for those born after 1959, the reduction in compensation for those claiming benefits at the age of 62 is 30 percent.
The lower benefits will remain in effect indefinitely: Once you reach full retirement age, your benefits will not be increased.
Solution: Wait Longer Before Claiming Benefits
It may be tempting to quit your work the day before you become eligible for Social Security, but this may not be the wisest financial option for your situation.
If you’re in excellent health and intend to have a lengthy retirement, delaying taking advantage of your retirement benefits could be critical in your later years.
If you can postpone retiring until after reaching full retirement age, your benefits might grow by as much as 8 percent per year you postpone until you reach the age of 70.
The Mistake: Waiting For a Long Time To Claim Benefits
Even while the monthly benefit increases with each month you wait to claim your benefits, this does not imply that it is always in your best interest to wait as long as possible to claim your benefits.
According to the theory, if you live to your average life expectancy, it makes no difference whether you claim benefits early or late.
This is because the quantity of the benefits decreases for claiming early, and the quantity of the benefit increase for delaying your claims will be equal.
However, only a small number of people are truly ordinary. A claim made early on in the event of bad health may result in larger rewards throughout your life.
Furthermore, suppose you are experiencing cash flow difficulties. In that case, an injection of monthly benefit checks at a younger age may be able to assist you in paying off debt or avoiding debt altogether, which may result in significant savings in the long term.
Solution: Analyze Your Situation Before Getting Benefits
Never assume that waiting till you are 70 years old is the best option for your scenario. Instead, crunch the numbers on your own or with the help of a financial expert, taking into account your circumstances.
For example, if you have health problems and don’t expect to live past the age of 75, let alone 80 or older, claiming benefits earlier will result in a larger overall benefit payment.
Regardless of when you choose to collect your Social Security benefits, be sure you enroll in Medicare at the age of 65 to avoid penalties.
The Mistake: Just Considering Your Benefits
If you register for Social Security benefits purely based on your earnings history, you may be eligible for a bigger payment than you are currently receiving.
It is especially significant if you do not have enough labor credits to qualify for the program based on your personal earnings history, as described above.
For instance, if you were a stay-at-home father while your husband worked, it is possible that you did not acquire the required 40 work credits to be eligible or that your benefit was insufficiently large.
However, you may be eligible for Social Security benefits based on your spouse’s work history.
Solution: Consider Your Spouse’s Income Record
Before deciding on how to claim benefits, find out how much you would be able to receive based on your spouse’s employment history.
If you are divorced, you may be able to claim benefits under your ex-earnings spouse’s record if the marriage lasted at least 10 years, you are 62 or older, you are unmarried, your ex-spouse can receive Social Security retirement or disability payments, and your benefit from your job is less than the benefit you would obtain under your ex’s companies’ ability.
If you are divorced, you may be able to claim advantages under your ex’s companies’ ability if the relationship lasted.
The Mistake: Not Coordinating Benefits With Your Partner
For married couples who each look at their benefits in isolation, they may be losing out on strategies that may help them optimize their combined retirement benefits.
Consider the following scenario: your spouse intends to file a claim for Social Security benefits based on your earnings record. In that situation, the spouse will not receive any additional credit for deferring claiming benefits past the full retirement age of 67 years.
Solution: Coordinate Your Claiming Plans
When you and your partner work together towards your Social Security program, you can ensure you’re maximizing your associated retirement profits.
When a low-earning spouse reaches full retirement age, they may begin claiming benefits of their spouse who earns a lot of money.
Meanwhile, the spouse with a higher income defers benefits to enhance their retirement credits. Because this method can be complicated, it is recommended that you contact a financial professional.
The Mistake: Not making a plan For Taxes on Social Security Benefits
Receive a significant amount of outside income, such as earnings or dividends. You may be exempt from federal income taxes on up to 85 percent of your Social Security benefits.
The percentage of your Social Security benefits subject to income taxes is determined by your combined income, equal to your adjusted gross income plus any nontaxable interest income plus half of your Social Security payments (if applicable).
If you register as an individual and your total income falls between $25,000 and $34,000, you may be liable for taxation on up to half of your benefits. If your combined income exceeds $34,000, you may be required to pay taxes on up to 85 percent of your benefits.
If you are a joint filer and your joint salary is between $32,000 and $44,000, you may be required to pay taxes on half of your benefits. If the amount is greater than $44,000, up to 85 percent of the total may be taxed.
Solution: Proactively Program For Taxes
Engaging in tax preparation can assist you in ensuring that you do not pay the IRS any more of your Social Security payments than you are legally required to do.
For example, if you’re going to make a charitable donation, consider making a local charitable distribution from your IRA to complete your necessary minimum payout rather than utilizing other funds to meet your requirement.
In this approach, the distribution does not increase your taxable income, and, in some cases, your Social Security payments may become more taxable as a result of the distribution.
The Mistake: Ignoring Work Regulations for Early Benefits
If you wish to continue working after receiving Social Security benefits, you may find yourself in need of financial assistance.
In the years before you get full retirement, your Social Security income is reduced by $1 for every $2 you earn more than the annual limit on your earnings during those years. Those who earned less than the full retirement age were subject to a yearly limit of $17,640 in 2019.
When you achieve full retirement age, your Social Security income is reduced by $1 for every $3 you earn more than the yearly maximum during the year in which you reach full retirement age. The yearly income limit for these individuals is $46,920 in 2019.
Solution: Budget For Previous Retirement
If you rely on premature Social Security benefits to augment your make billions of dollars in the years before reaching full retirement age, be certain that you understand the requirements for working while getting Social Security benefits.
You must be informed of the possibility of a reduction in your benefits. Once you reach full retirement age, you are no longer eligible for additional reductions.
Your benefit amount will be revised at this time to exclude the months during which your payments were decreased or delayed due to excess earnings from your account. You may, however, experience short-term cash-flow difficulties if you do not plan properly.
The Mistake: Remarrying Without Understanding How It Will Influence Your Benefits
Divorced elders who are 62 years or older can get benefits based on their ex-record spouse’s but only if they are unmarried at the time of their divorce.
It’s possible that you were reliant on your ex-benefits spouse’s because your salary was low or you won’t help, and that you would lose the ability to get those benefits if you remarried, but it’s not likely.
Solution: Understand the Implications Before Tying the Knot
The wedding can sometimes be much about finances as it is about love, especially as people get older and more financially secure.
If remarrying may cause you to lose out on your ex-Social spouse’s Security payments, take some time to consider whether it is financially beneficial for you to do so in the first place.
The Mistake: Waiting Till 70 To Make Spousal Benefits
The only time you will be eligible for delayed retirement credits is if you are the direct beneficiary of the benefits you are delaying past the full retirement age.
Because the Social Security benefits, you get as a spouse do not contain delayed retirement credits. There is no incentive to postpone receiving Social Security benefits until you reach your full retirement age.
If you delay, you’ll have lost out on years of savings that you could have been accumulating instead.
Solution: Retire at Full Retirement Age To Get Your Maximum Spousal Profits
However, even though you will not receive credits for deferring benefits beyond the full retirement age as a partner, if you intend to collect spousal benefits, you should intend to live at your retirement age to ensure that you receive the maximum benefits.
When you achieve full retirement age, you’ll be able to collect 50 percent of your spouse’s benefits, up to the maximum amount allowed under federal law.
Reach full retirement age at 67 and receive additional your spouse’s benefits at an early age of 62. According to the Social Security Administration, your benefit amount will be just around 32.5 percent of your spouse’s benefit amount.
The Mistake: Thinking Social Security Benefits Can Completely Cover Your Living Cost
Social Security benefits for retired workers totaled $1,471 per month on average for the first six months of 2019.
Although it may be feasible to live only on Social Security in some circumstances, doing so would almost certainly need a significant reduction in your standard of living.
Many people, however, may not be able to live solely on their Social Security income due to financial constraints. Planning to live only on Social Security — and then not being able to do so — puts you at risk of experiencing financial difficulties in the future.
Solution: Make a Well-Thought-Out Financial Program Before Retiring
The average monthly Social Security benefit for retired workers was $1,471 per month in June 2019. Although it might be possible to live off Social Security alone in some instances, it would likely require a big paring down of your lifestyle.
However, it may not be feasible for many people to live entirely on Social Security benefits. Planning to live on Social Security alone — and then not being able to put you at risk for financial problems down the line.
Even though Social Security can be a wonderful addition to other types of retirement income, it should not be your sole source of retirement income.
Maintain a strong nest account in a 401(k) or an IRA, and ideally set yourself up to have passive income sources that will keep paying out even after you leave your 9-to-5 job.