April 3, 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

Scoop Dreams Come True: Van Leeuwen Launches New Beverly Hills Shop

April 3, 2025

April 3, 2025

Van Leeuwen’s Beverly Hills Opening Comes With Sweet Perks Van Leeuwen Ice Cream, a New York City-born brand celebrated for...

WeHo’s WeHappy Wednesdays Serve Up Big Discounts In Addition to Zero Parking Fees

April 3, 2025

April 3, 2025

Free Parking and $5 Cocktails? WeHo Makes Wednesdays Worth It The City of West Hollywood and the West Hollywood Chamber...

Saijo Hand Roll Rolls into Culver City with Premium Japanese Ingredients

April 2, 2025

April 2, 2025

Binchotan-Fired Perfection: Saijo Rolls Out Premium Sushi in West LA A new destination for hand rolls and Japanese culinary craftsmanship...

(Video) Check Out Bernie’s, a New Pop Up at Citizen Public Market in Culver City

April 2, 2025

April 2, 2025

Made with fresh frozen fruit and a toasted merengue topping these flavors are irresistible. The pop up will be at...

From Cocktails to Coffee: U.S. Tariffs Threaten Imports, Jobs, and Your Grocery Bill

April 2, 2025

April 2, 2025

Major Price Hikes Expected for Coffee, Wine, Chocolate, and Butter  A sweeping new set of tariffs announced by former President...

Levain Bakery to Open Venice Location with Special Guests and Charitable Twist

April 2, 2025

April 2, 2025

Bigger Than a Cookie: Levain’s Venice Opening Is a Flavorful Fundraiser Levain Bakery, the cult-favorite cookie destination founded in New...

LAX Airport Server Finds Hate-Filled Message From Unidentified Diners

April 2, 2025

April 2, 2025

Waiter Says He Was Stunned by the Message Left by Customers Guillermo Ortiz, who works at Planet Hollywood inside the...

Sunset Strip Staple Le Petit Four Shuts Down After Landlord Pulls the Plug

April 2, 2025

April 2, 2025

End of an Era: Le Petit Four Forced to Close in West Hollywood In a stunning reversal to the upbeat...

Metro LA Pushes Back Sepulveda Transit Community Meetings

April 2, 2025

April 2, 2025

Environmental Review Delay Prompts Metro to Reschedule  Metro announced that community meetings scheduled for early April to discuss the Sepulveda...

WeHo Unveils ‘WeHappy Wednesdays’ to Support Shops and Restaurants

April 2, 2025

April 2, 2025

New West Hollywood Plan Makes Midweek Outings Easier and Cheaper In a bid to boost foot traffic and economic recovery...

County Board Approves New Homeless Agency, Redirecting Millions from Existing System

April 2, 2025

April 2, 2025

With Billions on the Line, LA County Moves to Centralize Homeless Response Los Angeles County is making a dramatic shift...

Put the Phone Down: LAPD and CHP Targets Distracted Drivers in April Crackdown

April 1, 2025

April 1, 2025

Hands-Free Law Violations Could Now Cost You More Than Just a Fine Throughout April, the Los Angeles Police Department will...

Kim Delaney, Partner Cleared After Weekend Arrest in Marina del Rey

April 1, 2025

April 1, 2025

Emmy-Winning Actress and Partner James Morgan Released Kim Delaney, the Emmy-winning actress recognized for her roles in NYPD Blue and...

(Video) Spending an Afternoon at Pacific Park on the Santa Monica Pier

April 1, 2025

April 1, 2025

Go To Pacpark.com For Tickets and More Information. Go To https://t.co/HneRcysYh5 For Tickets and More Information. #amusementpark #rides #rollercoaster #summer...

Matū Kai to Debut in Brentwood With Grass Fed Wagyu and Global Flair This Week

April 1, 2025

April 1, 2025

Farm-To-Fork Beef, Wood-Fired Flavors, and Sustainability Meet on San Vicente The team behind Beverly Hills’ acclaimed steakhouse Matū will soon...