Social Security recipients can get an additional benefit for dependent children, which alters the calculation about when to draw benefits. When John Bonadeo called Social Security, the representative asked whether he had any children under 18, unlocking a gusher of government money he hadn't known existed. Bonadeo, a semiretired general contractor now 72, and Betty Mc Donald had six adopted children; the youngest was 2. His benefits came with an additional roughly $600-a-month per child. "We were really floored," said Mc Donald, 69, a retired Secret Service agent in Del Mar, Calif.
There are more older parents than ever, learning by surprise about the dependent benefit. Once a parent or grandparent with a dependent files, a child can collect up to half of the full retirement-age benefit until 18, or 19 if in high school. The number of households headed by someone 65+ with a child under 18 tripled between 2000 and 2024, to about 410,000. Children collecting on retired workers' records grew by a quarter to 323,000 as of December 2024.
The dependent benefit complicates the decision of when to claim. Parents pursuing it generally collect more months of payments the earlier they collect, but waiting means a bigger monthly check for life. Deciding turns on how long a child has left, the parent's life expectancy, and family expenses. Elaine Floyd, a certified financial planner, gave an example where both parents claiming at 62 let a child collect for 10 years, versus two if waiting to 70, but waiting projected more lifetime benefits if they lived past 88.
Children can collect up to 50% of the parent's benefit, but a family maximum caps the total. Phillip Nieburg, a retired pediatrician, filed at 62-63 so his two youngest could collect, receiving just under $1,000 a month for their college accounts. He calculated waiting would have paid more if he lived past 80.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing