Q & A
Ask Rusty – College benefits for dependent child?
Dear Rusty: I am an older father, having recently been blessed with another child from my second marriage. I started collecting Social Security at my full retirement age and although my current wife is not yet eligible to receive benefits, I now have a young child whose future I need to worry about. So I’m wondering: is there any way Social Security will help pay for my child’s future college education when that time comes? Signed: Older Father
Dear Older Father: Well, Social Security won’t pay the tuition for your child directly, but since you’re already collecting benefits and have a young child from your second marriage, your dependent child is entitled to up to half the Social Security amount you are collecting. If you haven’t already, you should apply for this benefit right away. Then what you may do for your child is take advantage of what some have called a “Viagra College Fund”, that is, a Qualified Tuition Plan authorized by Section 529 of the Internal Revenue Code. This is often referred to simply as a 529 Plan, and every U.S. state and the District of Columbia, as well as many educational institutions, offer at least one type of 529 plan. You may want to establish a 529 for your dependent child and then deposit their Social Security benefits into that plan. There are two types of 529 plans – prepaid tuition plan and college savings plan. The former allows you to purchase tuition credits at a participating university and the latter simply establishes a savings account to be used for future college expenses. As you might expect, there are plenty of rules governing these plans, and you can find out much of what you need to know at https://www.sec.gov/investor/pubs/intro529.htm. You are to be commended for thinking so far ahead for your young dependent’s future. Your minor child’s Social Security dependent benefit could be as much as 50% of your benefit, and will normally continue until they are 18 years of age (or 19 if still a student or disabled), so a substantial amount of college savings could be accumulated in the 529 by the time he or she attends college.
The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at firstname.lastname@example.org.