Social Security Matters
Editor’s Note: After a long career in the data processing industry, Russell Gloor joined the Association of Mature American Citizens in 2013. Gloor received training from the National Social Security Association and was accredited by the NSSA® as a Social Security adviser in 2016. Currently part of the AMAC Foundation’s Social Security Advisory team, he annually counsels thousands of American seniors about their Social Security options. In addition to answering Social Security questions daily, he also authors the AMAC Foundation’s nationally syndicated weekly “Ask Rusty” advice column and has written three instructional books about Social Security.
Dear Rusty: I have a question about the family maximum Social Security retirement benefit. As I understand it, if the breadwinner is drawing retirement benefits or is deceased, the family maximum is calculated from a formula that yields a figure between 150% and 188% of the breadwinner’s primary insurance amount – his or her monthly benefit if claimed at full retirement age. That age is 66 and 4 months for people born in 1956 and will gradually increase to 67 over the next few years. Is this calculation only applicable at full retirement age (in my case 66 and 4 months) or is it still applicable if I delay taking Social Security until 68 or 70? My assumption is the breadwinner is the spouse with the higher income. Signed: Planning my Retirement
Dear Planning: The family maximum applies only when more than one dependent is collecting benefits from the record of a worker who is either deceased or collecting Social Security retirement benefits (the breadwinner). That might typically be a spouse and a minor child, multiple minor children, or, perhaps, multiple children and a spouse as well.
The family maximum doesn’t apply when both a current spouse and an ex-spouse are collecting benefits from that breadwinner – only when a current spouse and minor children are collecting too.
The family maximum also does not apply when only one dependent (e.g., a spouse) is collecting benefits from the breadwinner or when no dependents are collecting benefits on the breadwinner’s record. Neither would the family maximum restrict your benefit if you wait until you are age 70 to claim your maximum personal benefit. So, if your concern is the family maximum might limit your, or your wife’s benefit if you wait until age 68 or 70 to claim, you can discard that concern.
You are correct the family maximum formula, when it applies, yields a maximum total limit of 150% to 188% of the worker’s “primary insurance amount” or “PIA,” which is the amount the worker is due at full retirement age and, as you know, your FRA is determined by your year of birth. If the family maximum applies because multiple dependents are collecting Social Security benefits on your record, Social Security will determine your maximum family dollar amount, deduct your PIA (your FRA benefit) from that amount, and the remainder would be available to be shared equally among your multiple dependents. But if no one else, or only your wife, is collecting benefits on your record, the family maximum does not apply.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association. NSSA® and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit the website (amacfoundation.org/programs/social-security-advisory) or email firstname.lastname@example.org.