Hi Larry, both my husband and I will be laid off in the very near future. Husband is going to file application to collect social security retirement benefits. He would like to begin collecting either in January 2021, February 2021, March 2021 or April 2021 depending on what you might be able to tell us. Hi is 65, and would reach FRA on Sept. 4, 2021 (birthday is 7/4/1955).
Our daughter is 11 years old. I will be 49 years old this January 12, 2021.
We would like to make sure that filing before Nick's layoff date won't cause lost benefits. Nick's layoff date is March 5, 2021. Prior to that, we anticipate $16000 of income this year. He probably will receive a retention bonus of about $30,000 on or about March 5, 2021. Even though Nick's income through March 5, 2021 is less than $50,520 would social security withhold payments for January, February and March because of the amount of income he is making during those months? If so, should he apply for benefits to begin in April 2021? Does it matter that our daughter is a minor?
We would also like to double check if I will qualify for benefits as the caretaker of our daughter. The fly in the ointment is that I will receive severance when I'm laid off around February 12, 2021. We are going under the assumption that I won't receive any benefits this year because the amount of severance will be well above the earnings test limits. If that is the case, would I be able to apply to receive those benefits in 2022 so that my daughter can receive benefits in 2021 without her benefits being reduced due to family maximum? Otherwise, should I apply this year even though I won't receive benefits, and are we correct to assume that my daughter's benefits will be limited by the family maximum even though I won't receive anything due to my income being above earnings test limits?
P.S. we would like to take social security now and delay my husband taking his pension because the pension will accrue more/faster than would social security.
This is very convoluted, and I appreciate you taking the time to read this. I actually did a quick search to find someone who could help us with these questions and came up empty. I've been reading your columns for some time now and I know you are an expert on this topic, so thank you.
Hi,
No. As long as your husband doesn't earn more than $50,520 from January 1 through August 31 2021, his earnings wouldn't prevent him from being paid benefits starting with January 2021. Nor would they affect your daughter's child benefits or your potential child in care spousal benefits.
Your daughter's child benefits will not be reduced due to the family maximum (FMB) if she is the only person in addition to your husband who's drawing benefits on his record. However, if and when you file for child in care spousal benefits then both your benefit rate and your daughter's rate will be reduced due to the FMB.
Your severance pay would likely count as 2021 earnings for purposes of applying the Social Security's earnings test to your potential child in care benefits, but you could still be paid for any months that you don't work in 2021 regardless of how much your total earnings are in 2021. That's due to Social Security's monthly earnings test, which allows people who start receiving benefits in 2021 to be paid for any months in which they earn less than $1580.
It sounds like you and your husband should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits.
Best, Jerry
