Home Accountant Social security and you: the family maximum does not apply to couples | Economic news

Social security and you: the family maximum does not apply to couples | Economic news


I frequently get questions from prospective retirees who have heard of a “family maximum” that applies to Social Security benefits, and they are concerned that this rule will reduce the benefits due to them as a couple.

So here’s the message of this column: The family maximum rules don’t apply to a husband and wife who receive Social Security benefits alone. These maximum rules only come into play when children are involved. This usually means cases involving children receiving benefits on behalf of a deceased parent. Or it may mean limiting benefits to the families of someone who receives Social Security disability benefits. But it can also occasionally apply to retirees who still have minor children at home. When this happens, it is often because a retiree has had an adult child who has been disabled since birth.

But again, the focus of today’s column is the scenario of a husband and wife with no underage or disabled adult children at home.

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Q: I’m waiting until I’m 70 to take my Social Security so I’ll get 132% of my Social Security benefit. Then my wife, who has been a housewife all her life, will file on my file and she will receive 50% of my benefits. So combined, we’ll get 182% of my Social Security benefits. Our accountant said that would be a problem because Social Security rules set the family maximum between 150% and 188% of my benefit rate. The actual percentage depends on factors that I don’t quite understand. The accountant sent me this clipping of what he said was the Social Security settlement.


“The family maximum formula for Old Age and Survivors’ Insurance (AVS) benefits is based on the beneficiary’s primary insurance amount (PIA). The PIA is the basic amount of a beneficiary’s Social Security benefit before adjustments for retirement age, income, and other factors. SSA calculates the family maximum using a formula. Ultimately, this formula yields a maximum for each family that is between 150% and 188% of the Worker’s Basic Social Security Benefit, or PIA.

A: Do not worry. You’ll notice that the section of the rule book your accountant sent you refers to a “primary insurance amount,” which is basically your full rate amount at retirement age. This amount can never exceed a rate of 100%. You will get a higher monthly benefit amount (up to 32% more) because you are delaying filing for Social Security until age 70. But your PIA stays at that 100% rate.

Your wife will receive a rate of 50%. Thus, the maximum that a dependent husband and wife can obtain in Basic Combined Benefits (PIA) is 150%. (His AIP rate of 100% and spousal rate of 50%.) And that 150% rate does not exceed the lowest family maximum rate (which is 150%).

If you have a question about Social Security, Tom Margenau has a book with all the answers. It is called “Social security: simple and intelligent”. You can find the book at creators.com/books. Or look for it on Amazon or other book outlets. To learn more about him and to read past columns and view articles by other Creators Syndicate writers and cartoonists, visit www.creators.com.