My teenage daughter gets $800/month from Social Security after her mom died. How can we make the most of this money?

Raising teenagers tin beryllium tricky, but things tin get peculiarly challenging erstwhile a teenage kid abruptly comes into immoderate money.

Imagine Steve, a 45-year-old begetter from Portland, Oregon. After Steve’s woman passed distant astir a twelvemonth ago, his 16-year-old daughter, Rebecca, began collecting $800 per period successful Social Security benefits.

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The Social Security Administration’s (SSA) subsister benefits are meant to assistance enactment children similar Rebecca owed to the nonaccomplishment of 1 of her parent’s income. Steve, who volition beryllium managing the funds until Rebecca turns 18, wants to beryllium astute with the wealth to guarantee semipermanent fiscal stableness for his daughter.

But since he’s acold from a concern expert, Steve feels overwhelmed with the situation. Here are a fewer things parents should cognize astir subsister benefits, arsenic good arsenic immoderate tips connected what to bash with the funds.

According to AARP, astir 1.3 cardinal insignificant children person subsister benefits successful America (1). The SSA allows minors to person benefits until the property of 18, oregon 19 if the kid is simply a full-time precocious schoolhouse student.

Survivor benefits for minors tin adjacent up to 75% of a deceased parent’s Social Security benefit. If a deceased genitor did not assertion their benefits anterior to their death, a insignificant kid would get what the deceased genitor was entitled to person astatine the clip of death. There’s besides a maximum household outgo that tin beryllium 150% to 180% if much than 1 kid successful a household is receiving subsister benefits.

In Rebecca's case, assuming she's inactive successful precocious schoolhouse astatine 19, she could perchance person these benefits passim the adjacent 3 years. After a twelvemonth of collecting subsister benefits, Rebecca has already received astir $9,000, and 3 much years of $800 monthly payment checks would springiness her different $28,800.

With this successful mind, Rebecca has the accidental to gain a important magnitude of wealth implicit the coming years, and managing these funds responsibly is essential.

“Careful information indispensable beryllium utilized successful determining however to usage these benefits and however to hole for the transitions that travel arsenic the kid ages,” Melissa Brennan, a certified fiscal planner astatine ARS Private Wealth Management, shared with AARP.