Will My Wife and Daughter Have Their Social Security Cut When I Start Receiving Benefits?

 In Social Security

Question:

I’m currently 69 years old; my wife is 45 and we have a 10-year-old daughter. I have applied for my Social Security but have suspended it,  waiting until I’m 70 to start receiving my benefits (which should be approximately $3,000 a month then).
Currently, our daughter gets Social Security benefits of $913 a month and and my wife receives the same amount as her caregiver. I believe their benefits are calculated based on the family maximum benefit (FMB) minus my primary insurance amount (PIA).
All things staying the same, once I start receiving my own benefits their benefits be reduced due to me now also getting benefits? Or would still get approximately the same amount of benefits?

Response:

The following response is from Nora Yousif, a financial advisor with RBC Wealth Management. She is happy to be a financial planning resource for those with follow-up questions. She can be reached at nora.yousif@rbc.com or at 508.230.8960.

Your wife and daughter will experience a reduction in their benefits once you start receiving your own personal benefit. They have been receiving 50 percent of your PIA, which is the amount you would have received at your full retirement date, which was at age 66 in your case. When you start receiving your personal benefit, the family maximum rule will come into play. That FMB does include your personal benefit and is 1.5 to 1.88 times your PIA. Doing some rough math, your benefit plus your daughter’s and your wife’s benefit will exceed your FMB, resulting in a reduction in the amount going to your daughter and wife. I encourage you to reach out to your local Social Security office to find out what the exact reduced benefit amounts will be for your wife and child moving forward.

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