Got a Spouse and Kids? Don't Sign Up for Social Security Without Doing These 2 Things First

Key Points

• Your claiming age affects the size of your benefits -- and, sometimes, your family's benefits too.

• Claiming early will reduce your monthly benefit by up to 30%.

• Your family members can't claim Social Security benefits on your work record until you apply for checks.

• The $23,760 Social Security bonus most retirees completely overlook ›

Your Social Security retirement benefit is based on your work history, so it's easy to think that when you choose to sign up for checks only affects you too. That might be the case if you're a single adult without dependents. But if you're married or have minor or disabled children, the decision to claim Social Security isn't as simple as you might think.

You need to understand how your choices will affect the other members of your family if you hope to maximize your household benefits. That begins with the following two things.

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1. Understand how your claiming age will affect your spouse

Your claiming age affects the size of your own retirement benefit significantly. Everyone has a full retirement age (FRA), which the government assigns based on your birth year. It's 67 if you were born in 1960 or later. Some older adults have younger FRAs. You must wait until this age if you hope to claim your full benefit per check.

While you can sign up for benefits as early as age 62, doing so reduces your checks by up to 30%. That's enough to drop a $2,000 monthly benefit to $1,400 per month, and this change is usually permanent. Every month you delay boosts your checks a little until you turn 70 and qualify for your maximum benefit.

There are pros and cons to both early and late claiming. Claiming early gives you a greater number of checks, but each one is smaller. It also permanently reduces the survivor benefit available to your spouse and children after you pass away. This could be a serious problem if you believe your spouse will be heavily dependent upon their Social Security checks once you're gone.

Then there's claiming late, which gives you fewer checks but possibly a larger lifetime benefit if you live into your 80s or beyond. However, your partner can't apply for a spousal Social Security benefit until you sign up, so this could restrict their options. But if they qualify for their own retirement benefit, they can still claim this in the meantime.

It's a good idea to discuss your claiming strategy with your spouse before deciding when each of you will apply. Keep in mind that if you qualify for both a retirement benefit and a spousal benefit, the Social Security Administration will only pay you the larger of the two. You can't claim both at the same time.

2. Check whether your children qualify for benefits on your work record

Social Security also pays benefits to the children of qualifying workers if the child is under 18 (or 19 if enrolled full-time in secondary school). Adult children who were disabled before age 22 are eligible to claim a benefit on their parent's work record as well. While these scenarios aren't all that common, if they apply to you, they could give your household a few more monthly checks for covering expenses.

Like spouses, your children can't claim on your work record until you sign up for Social Security. So this might be a reason to sign up earlier than you might otherwise. You'll need to provide documentation, like your child's birth certificate, proving your relationship to them in order for them to be eligible.

Minor and disabled children may also be eligible for a survivor benefit after you pass away. But again, if you claim Social Security early, you reduce the amount they'll receive. If you have a short life expectancy and your family doesn't need the extra money right now, you may choose not to claim Social Security at all, so your family can get more money after you die.

Only you can decide which claiming age is most advantageous for you and your family. Talk it over with your spouse and ensure you're both on the same page about your decision. If you have any questions about how your claiming age could affect your benefits, it's best to contact the Social Security Administration. You can do this by phone or by scheduling an appointment at your local Social Security office.

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