January 28, 2020

Can I Transfer My Social Security Benefits to Children or Heirs?

When planning for social security distributions, a common question we hear from retirees is, can I provide a portion of my social security benefits to my child or grandchild? The answer is yes, but there are stipulations. Below are a few high-level points on this tax savings scenario and if it may be applicable for you.

Who can I transfer my social security benefits to?

Your biological, adopted child, or dependent stepchild may be eligible to receive your social security benefits if you become disabled, retire or pass away. The child must be:

  • Unmarried
  • Under the age of 18, or
  • 18-19 years of age and a full-time student in secondary school through grade 12, or
  • A child who is 18 or older and disabled with a disability that started before age 22

Grandchildren also qualify to receive a portion of social security benefits if the grandchild is a dependent and both of their parents are disabled, deceased, or you have legally adopted the grandchild.

How much can my family member receive?

If your family meets the criteria above, the qualified child is eligible for up to 50% of your full retirement age benefit or 75% for death benefits, subject to the family maximum. The benefits will stop when the child turns 18, unless the child is still in secondary school and taking a full course load. If the latter is the case, the benefits will stop when the child turns 19 or when they graduate, whichever comes first. Multiple children can claim a portion of the benefit, so you are not required to choose your favorite child!

When should they receive my social security benefits?

For a household with children, the decision of when to begin receiving social security retirement benefits is more complicated. In many cases, there are various reasons to delay filing for social security benefits depending on your situation.

If you have children at home, filing for social security early could make more sense because your children cannot collect a social security benefit until you file. If you file early, it will allow your children to also collect a portion of the benefit.

To learn more about how you could benefit from providing a portion of your social security benefit to your heirs, please contact an Anders advisor.


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