Older Parents Can Now Claim Social Security for Their Kids

Older parents have access to a little-known Social Security benefit that could help maximize lifetime benefits. Most people have never heard of it.

If you're at least 62, you might be able to claim Social Security and a dependent child benefit that'll give your kid a monthly check for half your full retirement age benefit, even if you're not 67 yet.

Only 1% of Social Security beneficiaries in January were children of retired workers, collecting an average $919.20 monthly. But the number of children born to women 45 and older has soared 450% since 1990. More people are becoming eligible for this benefit.

We get more calls on this than any other topic because it's not advertised by Social Security, so people just stumble upon it," said Michael Ruger, managing partner at Greenbush Financial Group. "The dollar amounts can be so large if your kid is young.

How the Dependent Benefit Works

You're eligible if you're 62 or older and eligible for Social Security, and your child is unmarried and under 17, or 18-19 and in school full-time, or has a disability that began before age 22.

If you claim Social Security before full retirement age, you'll get less in benefits for the rest of your life. But your child can start receiving half of your full retirement age amount until they turn 18 or 19 in some cases.

The benefit can be substantial. Some families say it's even helped them save for college.

What Happens with Multiple Children

If the total for all children exceeds the family limit of about 150% to 180% of the parent's full retirement age amount, Social Security will reduce each child's benefit proportionately. The parent's benefit stays the same because it doesn't count toward the family limit.

Working While Claiming

You can work but there's a catch. For 2025, if you're under full retirement age, benefits are reduced by $1 for every $2 earned over $23,400. In your full retirement age year, the reduction is $1 for every $3 earned over $62,160. The reductions end the month you reach full retirement age and get refunded over time with small increases to monthly benefits.

"People make the mistake and think they'll take mine but won't touch my child's," Ruger said. "That's not correct. They'll go after the child benefit too because it's claimed on your work history."

Is This Benefit Worth Claiming?

It depends on each person's situation.

"If you have an overfunded retirement plan and have money, the impact of when to take Social Security is not as large," said Andrew Wood, retirement planning adviser with Daniel A. White & Associates. "But if you're underfunded, then increasing Social Security improves outcomes. It may be tempting, but it could hurt your retirement in 10 to 15 years because of the lower payments from claiming early."

Other advisers say claiming the benefit could boost overall savings. In one example, a parent claiming at 62 with two young children could receive a combined $760,500 in lifetime Social Security payments by age 90, compared to $690,000 if they waited until full retirement age. That's $70,500 more by claiming early with children.

Other Things to Consider

• The children's money is tax free. They likely won't earn enough to pay federal tax and most states don't tax Social Security.

• You can still claim the child as a dependent on your taxes.

• A second parent can continue working normally without affecting the family benefit.

• Parents can save and invest the child benefit. Just make sure accounts are titled solely in the child's name so Social Security can't demand leftover money back later.

"If you don't need the money, you can use it to seed the future," Ruger said.

About 20% of a child's savings count against need-based financial aid. "It's not the end of the world," Ruger said. "It was free money from Social Security that can be used to pay for college."

This benefit exists and barely anyone uses it. It's worth looking into if you're an older parent with young kids.

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