An Overlooked Opportunity for Eligible Households

While most people think of Social Security as a retirement benefit, the system can also provide valuable income to the dependent children of parents receiving retirement benefits. When working with clients age 62 or older who still have children under age 18 living at home, we often evaluate whether their retirement filing strategy could unlock Social Security dependent benefits.

This is one of the least-understood Social Security provisions—and, for eligible families, it can translate to thousands of dollars per year paid to dependent children. These benefits can meaningfully support family expenses, college savings, and long-term planning.

At Greenbush Financial Group, we help families understand how these benefits work, when they are available, and how claiming decisions may impact their overall financial picture.

How Dependent Benefits Work

If a parent has filed for their own Social Security retirement benefit and has a dependent child:

• Under age 18, or

• Under age 19 and still in high school,

then that child may qualify to receive a monthly benefit based on the parent’s Social Security record.

In most cases, the dependent benefit is worth up to 50% of the parent’s full retirement age (FRA) benefit, subject to family maximum limits. This benefit is paid directly to the child (typically via a representative payee) and continues until they reach age 18—or 19 if still enrolled in high school.

For families who qualify, these benefits can amount to tens of thousands of dollars over time.

Because eligibility begins only once the parent has filed for retirement benefits, this benefit can influence filing strategy and create incentives to begin claiming earlier in select households.

Key Considerations & Rules

While the concept is straightforward, dependent benefits involve several important rules, including:

1. Parent Must Be Receiving Benefits

Children only become eligible once the parent has started receiving their own retirement benefit.
Delaying benefits could delay or eliminate dependent eligibility.

2.  Beware The Social Security Earned Income Penalty

For an individual who files for social security benefits prior to their Full Retirement Age and they are still working. They have to be aware of the Social Security earning income penalty, which once the parents' income is above a certain threshold, Social Security is able to reduce BOTH the parents' benefit and the child’s benefit.

3. Family Maximum Rules

There is a cap on how much a family can receive in total benefits, often affecting households with multiple eligible children.

4. Taxation of Child Benefits

Dependent benefits are considered the child’s income, not the parent’s.
Depending on total income, the benefits may be taxable to the child.

5. College Financial Aid Implications

Because benefits are treated as income to the child, they may affect:

• FAFSA calculations

• Expected Family Contribution

• Future financial aid eligibility

This makes it important to evaluate whether funds should be spent, saved, or coordinated with other planning vehicles.

6.  Social Security Clawback Rules

If parent wish to save the Social Security dependent benefits for the child  to use beyond age 18, parent have to make sure that they account that is holding the saved social security benefits is titled correctly

Why Dependent Benefits Matter in Filing Strategy

For households with minor children, the potential value of dependent benefits can significantly influence when a parent chooses to begin receiving Social Security. In some cases, filing earlier may result in more total lifetime benefits when dependent payments are included—even if it means receiving a permanently lower personal benefit.

We help clients evaluate:

• The projected value of dependent payments

• Break-even comparisons based on different filing ages

• Funding uses (education savings, child expenses, etc.)

• Implications for college financial aid

• Taxation and reporting requirements

This analysis helps ensure that families make informed decisions rather than unintentionally leaving benefits unclaimed.

Common Questions We Help Clients Answer

• How much could my child receive in monthly dependent benefits?

• Should I file for Social Security earlier to unlock child benefits?

• How are dependent benefits taxed?

• Does the money have to be spent on the child?

• How do payments affect college financial aid?

• How is a representative payee selected?

• Can dependent benefits continue while a child is in college?

Our Role

At Greenbush Financial Group, we help families:

• Understand eligibility rules

• Quantify potential benefits

• Model filing scenarios, including dependent benefits

• Evaluate tax consequences

• Coordinate benefits with 529 plans and college planning

• Comply with representative payee requirements

Our goal is to ensure families with minor children understand all available benefits and make informed decisions that support long-term financial success.

Next Step

If you are age 62 or older and still have dependent children at home, dependent benefits may be a valuable opportunity to support your family’s goals.

Many families do not realize these benefits exist—and may leave substantial value unclaimed without proper planning.

Contact Us . . . .

All of our services start with a complimentary consult. No high pressure sales tactics. We are financial planners, not salesmen. Schedule Yours Today.

About Our Firm:  Greenbush Financial Group is an independent registered investment advisory firm based in Albany, New York, that provides four main services to clients: fee-based financial planning services, investment management, employer-sponsored retirement plans, and retirement planning services.  The firm serves clients locally in the Albany region and virtually across the United States.

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