June 1, 2025 #1 Local News, Information and Event Source for the Century City/Westwood areas.

Ask Rusty – High Earners and the Family Maximum

Dear Rusty: My question is this: If both spouses are high earners with significant Social Security contributions in their own right, delaying their benefits to get a bigger Social Security amount could mean they will exceed the maximum “family” payment. Isn’t it to their advantage for both spouses to take Social Security at 62 at the “reduced amount” if together they would still exceed the “family maximum?” Otherwise, aren’t they leaving money on the table and getting no increase in payment by delaying collecting? Signed: Inquiring Mind

Dear Inquiring: What an excellent question! Let’s lay out the pieces:

1) Regardless of how much these hypothetical “high earners” actually earned, they would have only paid payroll taxes up to the annual contribution limit for each year they worked. That limit – $127,200 for 2017 – increases periodically if a formula used by the Social Security Administration calls for it. Once they reached the earnings contribution limit each year they would have no longer paid into Social Security for that year.

2) Let’s assume that the earnings of both were greater than the annual contribution limit for their entire careers, and that they are both eligible for the maximum monthly benefit ($2,687 for 2017) at their full retirement age. Their combined SS benefit based upon their own work records at their full retirement age (assumed as 66) would be $5,374.

3) The Family Maximum applies to survivors, spouses, and children, etc. families who receive benefits based upon a primary wage earner’s work record. Couples who collect only retirement benefits are not affected unless three or more family members receive benefits. So, in this hypothetical example of two high wage earners, the Family Maximum benefit does not apply.

So the answer to your question is: For these two high-earners, applying early for both of their benefits at age 62 will cause them both to receive benefits at a permanently reduced rate of about 75 percent ($1,934) of their full amount. If they delay they can both receive their full benefit amount ($2,687) at their full retirement age, and if they choose to defer beyond their full retirement age their benefits will continue to grow at about 8% per year until they are age 70, when their monthly benefit amount would be about $3,546 each, or $7092 combined.

Ask Rusty

 

 

 

 

 

 

The AMAC Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at info@amacfoundation.org

Related Posts

Defensible Space, Defined: How A Plus Tree Protects Communities from Wildfire

May 30, 2025

May 30, 2025

In the wildfire-prone landscapes of the Western United States, safeguarding homes and communities requires proactive measures. A Plus Tree, a...

WeHo Pride Weekend Begins and 2025 Icons Announced: Parades, Concerts, and Community Celebration Kicks Off

May 29, 2025

May 29, 2025

Three-Day LGBTQ+ Festival Features Performances by Lizzo, Maren Morris, and Kim Petras West Hollywood is preparing to kick off its...

Where to Find Convenient Parking for WeHo Pride Weekend Festivities For a Reasonable Price

May 29, 2025

May 29, 2025

Pride Celebrants Can Choose From Self-Parking, Valet Service, EV Charging As the city gears up for Pride weekend, the Beverly...

Palisades Village to Reopen in 2026 with Revamped Retail, Dining, and Community Spaces

May 29, 2025

May 29, 2025

Elysewalker Set to Return With Park Reconstruction, Holiday Events, and Streetscape Upgrades Palisades Village, the open-air shopping and lifestyle destination...

Bel Air Seventh Grader Reaches Finals of Scripps National Spelling Bee

May 29, 2025

May 29, 2025

Oliver Halkett of Mirman School Competed on Thursday for a $50,000 prize Thirteen-year-old Oliver Halkett, a seventh grader from Mirman...

(Video) Signs That Your Aging Loved Ones Are in Need of Caregiving

May 29, 2025

May 29, 2025

To Find Out More, Go To Safelyhomeagain.com To Find Out More, Go To https://t.co/k0452YE9UA pic.twitter.com/wGolXdzlJA — CCNewsLA (@CCWNNews) May 30,...

Salt & Straw Unveils Summer Pie Series with Five Seasonal Ice Cream Flavors

May 29, 2025

May 29, 2025

Five New Flavors Inspired by Classic Summer Pies Will Be Introduced Salt & Straw is giving summer a scoopable twist...

(Video) Interviews with Rick Caruso and Elyse Walker, with a Dennis Quaid cameo

May 28, 2025

May 28, 2025

We spoke at the Press Conference to announce plans to reopen Palisades Village Shopping Mall. Actor Dennis Quaid arrives to...

Levain Bakery Debuts ‘Levain à la Mode’ with Local Ice Cream Partners for Summer

May 28, 2025

May 28, 2025

Seasonal Offering With Wanderlust Creamery is a First in Cookie Shop’s History For the first time in its three-decade history,...

Beverly Glen Sixth Grader Advances to Finals of National Student Cook-Off

May 28, 2025

May 28, 2025

Twelve-Year-Old Heads to Virginia to Compete in K12 Culinary Competition Abijah Levy Minor, a 12-year-old student from Beverly Glen, has...

Sarah Paulson to Host Charity Bingo Night for Pasadena Humane Society on June 5

May 28, 2025

May 28, 2025

Evening of Food, Wine, and Live Music to Raise Funds for Animal Rescue Efforts Emmy-winning actress Sarah Paulson will host...

Bay Cities Italian Deli Responds to Health Code Closure, Commits to Corrective Action

May 28, 2025

May 28, 2025

Santa Monica Landmark Disputes Rodent Claims but Acknowledges Violations Bay Cities Italian Deli, a Santa Monica staple renowned for its...

Film Review: Bring Her Back

May 28, 2025

May 28, 2025

By Dolores Quintana Grief is the price of love.  Danny Philippou and Michael Philippou’s second feature film, Bring Her Back,...

Caltrans Schedules Public Meeting for $143.7 Million I-405 Rehabilitation Project

May 28, 2025

May 28, 2025

Virtual Forum Set to Brief Residents on Upcoming Construction The California Department of Transportation (Caltrans) will hold a virtual public...

Crustacean Launches ‘Little C’ Vietnamese Pop-Up to Celebrate Chef Helene An’s Legacy

May 28, 2025

May 28, 2025

Three-Day Lunch Series Honors AAPI Heritage Month With Chef’s Personal Recipes Crustacean Beverly Hills will host a limited-run pop-up dining...