I filed for retirement benefits in August 2021 at 70. We have 2 children (11 and 14) who are eligible for benefits on my record and my wife is not yet retirement age, so the children are recieving the children's benefit and my wife is receiving the child-in-care benefit. The children's benefits and child-in-care benefit are of course reduced because of the family maximum. I am still working so we are in the 22% tax bracket now and expect to be in the 22% or 12% bracket after I stop working. I am wondering if we made a mistake by taking the child-in-care benefit due to the fact that it will be taxed and the children's benefits are not taxed. If we were NOT taking the child-in-care benefit, we would be receiving the same total amount because the family maximum would still apply and the 2 children's benefits would be higher. In effect, these "extra" benefits would be divided 2 ways instead of 3 ways. The big difference is that the child-in-care benefit would not be taxed.

I wanted to confirm that the family maximum would in fact work this way. I couldn't get the maximizemysocialsecurity calculator to turn off the child-in-care benefit, so I ran it twice, once as married and once as single. This confirmed that I was right and the total amount received would be the same. Then I approximated the taxes on the child-in-care benefit benefit amounts. Over the next 5 years, the difference in taxes would be somewhere between $5000 and $8000 (depending on marginal tax rate).

If this is all correct, can we suspend the child-in-care benefit? There is one year (2026) where it appears we would come out slightly ahead (about $1500 before taxes) by claiming the the child-in-care benefit, so we could restart it then (after that one year it would have no overall effect if we received it).

Hi. No, your wife can't voluntarily suspend her child in care benefits. She could, however, withdraw her application. Technically, though, in order to withdraw an application you must first refund any benefits that you've been paid. But, it sounds like in your case the amount that your wife would need to refund would then be owed to your children as an underpayment. If your wife does withdraw her claim, she would need to file a new application in order to start receiving benefits again.

Best, Jerry