Dependents' Social Security benefits impacted by your actions
Whatever affects your Social Security benefit also has an impact on your dependents’ benefits based on your work record. Credit: iStock
I collect Social Security for myself and for my 16-year-old daughter. I'm 64 and will soon start a part-time job that pays $30,000 a year. Will this affect my daughter's benefit and mine? Should I suspend my benefit and start it again at age 66? Or do I collect it through the year until I've earned $15,000, and then forfeit some of it?
The latter. You can't voluntarily suspend your benefit until you reach your full retirement age of 66.
In 2014, if you're under full retirement age and work while collecting Social Security, $1 of benefit is withheld for each $2 you earn above $15,480 until the year you turn 66. Your daughter's benefit is affected too, because the forfeit applies to each benefit paid on your work record.
If you earned $30,000 in 2014, you'd forfeit $7,260 of benefit ($30,000 minus $15,480 = $14,520, divided by 2 = $7,260). That means you and your daughter would each forfeit $7,260 of 2014 benefits, says Linda Lauria, a Social Security spokeswoman.
Here's how the formula works: Let's say your benefit is $1,100 and hers is $550, so together you receive $1,650 a month. The total amount you forfeit in this scenario is the equivalent of 4.4 months of your combined benefits. Social Security rounds up, so it would withhold five months of benefits from each beneficiary, says Lauria.
But if your new job doesn't start until this month, you'll earn only $7,500 in 2014 and won't forfeit any benefit. In 2015, the forfeit applies. In 2016, the year you turn 66, you forfeit $1 for each $3 you earn above $41,480 until your birthday. Then it disappears.
The bottom line Whatever affects your Social Security benefit also has an impact on your dependents' benefits based on your work record.
Websites with more information nwsdy.li/earningscap and nwsdy.li/socialsecurity2014
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