Family members of someone who gets benefits from Social Security may be able to claim their own monthly checks based on that person’s earnings record. But the government limits the amount of benefits that can be paid out to a family on one earnings record. This cap is the maximum family Social Security benefit, and it’s typically 150% to 180% percent of the benefit that the primary beneficiary is entitled to at full retirement age. Social security payments are often a cornerstone of retirement income for families and individuals alike. If you’re not sure how social security fits into your retirement plans, it may be a good idea to speak with a financial advisor. Check out SmartAsset’s free advisor matching tool today.
Maximum Family Benefit Basics
The maximum family benefit allowed by Social Security is different from the maximum individual benefit. The maximum family benefit only affects benefits paid to other eligible family members. These may include spouses, minor children, disabled adult children and dependent parents.
The Social Security Administration uses a complicated formula to set the precise limit a family can receive. You can get a quick estimate of your family maximum benefit by checking your My Social Security account at SSA.gov. If you don’t have a My Social Security Account, it may be a good idea to open one.
After logging into My Social Security, look for the section near the bottom of the first page labeled, “Your family qualifies for Survivors Benefits.” Then, click on the link labeled, “Learn more about Survivors Benefits.” The table that pops will display your maximum family benefit at the bottom.
Social Security Auxiliary Benefits
In addition to the individual benefit the primary earner can claim, eligible family members each can claim auxiliary benefits of up to 50% of the primary earner’s benefits. The maximum family benefit comes into play when two or more family members claim auxiliary benefits based on one primary earner’s record.
For example, say a family’s primary breadwinner retires at full retirement age and is eligible for a benefit of $2,000 a month. A non-working spouse with no earnings record who has reached full Social Security retirement age can claim an auxiliary benefit of $1,000 a month, equal to 50% of the primary breadwinner’s earnings record.
Combining the primary breadwinner’s $2,000 benefit with the spouse’s $1,000 auxiliary benefit makes a total of $3,000 in Social Security benefits for one family. There is no need to figure the maximum family benefit here, because it only applies when two or more family members claim benefits based on one person’s earning record.
Now let’s say also that the couple has an adult child who, because of a disability, is also eligible to be paid 50% of the primary breadwinner’s benefit. This would come to another $1,000 and, added to the benefits paid to the primary breadwinner and non-working spouse, bring the family’s total benefit to $4,000.
Since two family members are claiming auxiliary benefits based on one person’s earning record, the maximum family benefit comes into play. The maximum family benefit can’t be more than 180% of the primary earner’s benefit. Since 180% of $2,000 is $3,600, a $4,000 benefit would put the family $400 over the maximum.
While 180% of the primary breadwinner’s full retirement age benefit is the absolute maximum, in practice, the typical maximum family benefit is usually 175% of the primary earner’s benefit. Again, the formula the Social Security Administration uses is quite complex, so in most cases using 175% will produce a reliable figure.
How Social Security Adjusts Family Benefits
Social Security adjusts the auxiliary benefits it pays to keep the family benefit below the maximum. The primary earner’s benefits are never reduced due to the family benefit exceeding the maximum allowed. Only auxiliary benefits are reduced.
The reduction gets distributed equally among the family members receiving auxiliary benefits. In the above example, the spouse and the child would each have their benefits reduced by $200 to keep the family benefit from exceeding the maximum of $3,600.
The benefits paid to each auxiliary recipient may change over time. For instance, minor dependent children getting auxiliary benefits will stop being eligible, in most cases, after age 18. As that happens, the auxiliary payments going to other family members increase up to the maximum.
Maximum Family Benefit Exceptions
The maximum family benefit applies differently in some situations. For example, an ex-spouse is usually entitled to claim benefits based on his or her former spouses’ earnings record. These benefits don’t count against the maximum family limit.
A non-working spouse who retires before reaching full retirement age could qualify for a reduced percentage of the primary breadwinner’s benefits. And if a family has two earners who are both eligible for benefits, each spouse can receive 100% of their own benefit, even if this would put the family over the maximum. This is because it only applies to benefits that can be claimed based on one earner’s record.
Another special case is when a minor dependent child is entitled to receive benefits from both retired parents. Then, Social Security uses a different limit, called the combined family maximum. The family maximum in this case can be as high as the total of both parents’ calculated family maximum, as long as it doesn’t exceed the combined family maximum.
Bottom Line
The Social Security Administration limits the maximum benefit that can be paid to a single family. In most cases, this amount will be equal to between 150% and 180% of the benefit that would be paid to the primary breadwinner upon reaching full retirement age. The maximum family benefit only applies when two or more family members, such as spouses or children, claim auxiliary benefits based on one family member’s earnings record. It’s a good idea to understand these maximum benefit rules incase they apply to you.
Tips for Retirement Planning
- Understanding how much you and your family can expect to receive in Social Security benefits is an important part of savvy retirement planning. A financial advisor can help you figure it out. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- SmartAsset has a number of free online retirement resources for you to use if you’re trying to bolster your retirement plans. If you’re not sure where to get started, consider checking out our free retirement calculator.
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