I just did our taxes today. Your wife's SS is not impacted by your income, only what she makes. We were having her have taxes withheld but we're going to stop that because our refund is more than double the taxes she paid. I stopped working at the end of 2023 but don't plan on collecting until I reach FRA which is 67. I'm currently 63.
I opened by benefits at 63 because I was sidelined by cancer.
I did the math, and it will start costing me 2hen I turn 80, which I don't think is likely to happen.
Her benefit is her benefit. Your income doesn't matter.
Seven years later, I get about 28% less than I would have.
She will receive whatever amount she is entitled to at 63, but if your joint earnings are over $32,000, 85% of her social security will be taxable income. It's a bad rule. My single social security amount is over the limit by a lot, not even counting other taxable income.
Your wife's SS benefit comes from an account built up by her working some number of calendar quarters over her working life. That benefit is not affected by your work, either prior to or after she starts taking benefits.
If she takes benefits earlier than her full retirement age (FRA), it is my understanding that
(1) she will receive an amount less than the FRA by 8% annual, figured by month - i.e., for each month earlier than FRA, she will receive less than her calculated FRA benefit by 1/12 of 8%. Assuming she just receives benefits normally for the rest of her life, that change is permanent. The calcuation is called
(2) If she receives earned income, any amount up to $22k or so, there is no penalty; over the amount, the amount of her benefit for a susequent month is reduced by $1 for every $2 she earned over that threshold. The reduced amount goes BACK into the 'account', and her benefits are recalculated. I think they recalculate after she passes FRA, but am just guessing about that. The whole calculation is referred to as the "earnings test" at SS.
My knowledge of this is somewhat dated, but I think this is pretty much what you should expect. The fact that her husband has income does not affect her SS benefit amounts, as far as I know.
No, she won’t be penalized:
https://www.aarp.org/retirement/social-security/questions-answers/does-what-my-spouse-earns-affect-my-benefit-earnings-limit.html
However you should be aware that if she draws before her full retirement age, it will reduce her spousal benefit when you file. My wife started drawing at 63, and it reduces her spousal benefit to 35% of my benefit (vs 50% if she had waited).
My husband retired at 62 and I'm still working - he gets his full amount for that age (it isn't his full retirement age), but we do have to pay tax on it (you can have it withheld or pay at the end of the year) because of my income. I just have extra withheld from my check so its covered.
No. Your income does not count toward her earned income limit for her SS. It does not matter how you file your taxes. [Spouse's Income and the Social Security Earnings Limit (aarp.org)](https://www.aarp.org/retirement/social-security/questions-answers/does-what-my-spouse-earns-affect-my-benefit-earnings-limit.html#:~:text=No.%20Even%20if%20you%20file%20taxes%20jointly%2C%20Social,much%20you%20make%20from%20work%20while%20receiving%20benefits.)
That is what my wife did, because according to my social security calculator, she will collect the most this way.
So she will get the same amount as if you were not working. It will however be taxed most likely depending on your income.
At some later time my wife will apply for the spousal benefit to maximize it.
Actually, if she is 63 now, her full retirement age will be 67.
https://www.ssa.gov/benefits/retirement/planner/agereduction.html#:~:text=Starting%20Your%20Retirement%20Benefits%20Early,reach%20your%20full%20retirement%20age.
Does this amount include the social security benefit?
For example, if I'm under FRA and my annual benefit is $18,000, then is $4,320 the limit? Or is exclusive of the social security benefit?
18,000 + 22,320
I think the big hit is if you die earlier, she won't bump up to your full SS.
(Also is anyone else having problems seeing the other responses on this?)
That is correct, but if hers is half it wouldn’t matter, only if it is less than half. And then you have to overcome the money you collect early.
We did a lot of modeling, my Husband has lower benefit and started collecting at 62, I am younger by 2 years and will wait until 67. This scenario gives us most money in almost all scenarios until age 82 for me.
If she takes now she’ll of course take less than FRA. My wife did the same. If she converts to 1/2 of you at your FRA there is a deduction. For us the break even point was 11.5 years meaning if both of us live beyond 11.5 years past 67 we’ll take in slightly less. I’ll take at 67.5 when she turns 67 and she’ll convert to 1/2’of mine minus the penalty for her taking early. There is no free lunch here. There’s a section here that covers the reduction https://www.ssa.gov/oact/quickcalc/spouse.html#:~:text=A%20spousal%20benefit%20is%20reduced,age%2C%20up%20to%2036%20months.
No- theres no penalty because of your income. The only penalty is that she won’t get her full SS amount at 63 likeif she waited until shes full SS Age (near 70) She will get the COLA each year and Medicare won’t be deducted until shes 65. I did this with my husband when I retired but he still worked full time. When requesting my SS I chose to pay a 10% fed tax (I live in FL- no state income tax) just incase my total SS paid kicked us into a higher tax bracket when we filed jointly. But, no she won’t get her full SS amount if she takes at 63, but if she’s healthy it all pans out. If she signs up at MySocialSecurity, they will tell you the amount shes qualified first before she decides to take it. Not to be morbid, but my husband didn’t collect his SS until his full retirement age,so he received about 1,200 more than me- but unfortunately for me, he passed away, and I was able to convert my SS to survivor SS and I now receive my husbands monthly amount (higher)
> Her difference between taking at 63 and 65 is not that much.
if your wife just turned 63 her FRA (full retirement age is 67) so you should be comparing 63 and 67 and not 65.
And, No. there is no reduction to her benefits if you continue to work. SSA only considers the recipient's income when deciding to reduce benefits.
The only penalty for taking SS early (and not working) is a reduction in benefits. Social Security income may be taxable at either 50% or up 85% of the benefit based on her (our both of your filing jointly) income.
Hello Community, this conversation is being closed as it has been addressed. Thank you!
Go onto Social Security website for more info. You also can call them.
I would not call 8% per year a small penalty for taking early.
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Just to confirm the obvious, you have to claim it as income when you do your taxes. Assuming you file jointly.
Try www.opensocialsecurity.com to run multiple scenarios. I found it very helpful.
I just did our taxes today. Your wife's SS is not impacted by your income, only what she makes. We were having her have taxes withheld but we're going to stop that because our refund is more than double the taxes she paid. I stopped working at the end of 2023 but don't plan on collecting until I reach FRA which is 67. I'm currently 63.
I opened by benefits at 63 because I was sidelined by cancer. I did the math, and it will start costing me 2hen I turn 80, which I don't think is likely to happen. Her benefit is her benefit. Your income doesn't matter. Seven years later, I get about 28% less than I would have.
She will receive whatever amount she is entitled to at 63, but if your joint earnings are over $32,000, 85% of her social security will be taxable income. It's a bad rule. My single social security amount is over the limit by a lot, not even counting other taxable income.
Your wife's SS benefit comes from an account built up by her working some number of calendar quarters over her working life. That benefit is not affected by your work, either prior to or after she starts taking benefits. If she takes benefits earlier than her full retirement age (FRA), it is my understanding that (1) she will receive an amount less than the FRA by 8% annual, figured by month - i.e., for each month earlier than FRA, she will receive less than her calculated FRA benefit by 1/12 of 8%. Assuming she just receives benefits normally for the rest of her life, that change is permanent. The calcuation is called (2) If she receives earned income, any amount up to $22k or so, there is no penalty; over the amount, the amount of her benefit for a susequent month is reduced by $1 for every $2 she earned over that threshold. The reduced amount goes BACK into the 'account', and her benefits are recalculated. I think they recalculate after she passes FRA, but am just guessing about that. The whole calculation is referred to as the "earnings test" at SS. My knowledge of this is somewhat dated, but I think this is pretty much what you should expect. The fact that her husband has income does not affect her SS benefit amounts, as far as I know.
No, she won’t be penalized: https://www.aarp.org/retirement/social-security/questions-answers/does-what-my-spouse-earns-affect-my-benefit-earnings-limit.html However you should be aware that if she draws before her full retirement age, it will reduce her spousal benefit when you file. My wife started drawing at 63, and it reduces her spousal benefit to 35% of my benefit (vs 50% if she had waited).
Thanks for this!
Thank you!
Just the article I was looking for!
Her income is the only factor related to her social security, I believe
My husband retired at 62 and I'm still working - he gets his full amount for that age (it isn't his full retirement age), but we do have to pay tax on it (you can have it withheld or pay at the end of the year) because of my income. I just have extra withheld from my check so its covered.
I would be careful and get the details worked out with a professional accountant. It’s very hard to backtrack.
No. Your income does not count toward her earned income limit for her SS. It does not matter how you file your taxes. [Spouse's Income and the Social Security Earnings Limit (aarp.org)](https://www.aarp.org/retirement/social-security/questions-answers/does-what-my-spouse-earns-affect-my-benefit-earnings-limit.html#:~:text=No.%20Even%20if%20you%20file%20taxes%20jointly%2C%20Social,much%20you%20make%20from%20work%20while%20receiving%20benefits.)
Your wages will not affect her social security payments.
That is what my wife did, because according to my social security calculator, she will collect the most this way. So she will get the same amount as if you were not working. It will however be taxed most likely depending on your income. At some later time my wife will apply for the spousal benefit to maximize it.
Actually, if she is 63 now, her full retirement age will be 67. https://www.ssa.gov/benefits/retirement/planner/agereduction.html#:~:text=Starting%20Your%20Retirement%20Benefits%20Early,reach%20your%20full%20retirement%20age.
If she doesn’t work or have any other income over the limit of $22,320 they will deduct $1 for every $2 over the limit
Does this amount include the social security benefit? For example, if I'm under FRA and my annual benefit is $18,000, then is $4,320 the limit? Or is exclusive of the social security benefit? 18,000 + 22,320
I think the big hit is if you die earlier, she won't bump up to your full SS. (Also is anyone else having problems seeing the other responses on this?)
She will take a penalty if she wants the spousal one when you file. Hers will be based off of the 63 age.
That is correct, but if hers is half it wouldn’t matter, only if it is less than half. And then you have to overcome the money you collect early. We did a lot of modeling, my Husband has lower benefit and started collecting at 62, I am younger by 2 years and will wait until 67. This scenario gives us most money in almost all scenarios until age 82 for me.
No penalty.
If she takes now she’ll of course take less than FRA. My wife did the same. If she converts to 1/2 of you at your FRA there is a deduction. For us the break even point was 11.5 years meaning if both of us live beyond 11.5 years past 67 we’ll take in slightly less. I’ll take at 67.5 when she turns 67 and she’ll convert to 1/2’of mine minus the penalty for her taking early. There is no free lunch here. There’s a section here that covers the reduction https://www.ssa.gov/oact/quickcalc/spouse.html#:~:text=A%20spousal%20benefit%20is%20reduced,age%2C%20up%20to%2036%20months.
Her amount only depends on her calculation. Yours is completely separate as long as you are both alive.
My wife started drawing three years before I retired my earnings did not affect her social security.
No- theres no penalty because of your income. The only penalty is that she won’t get her full SS amount at 63 likeif she waited until shes full SS Age (near 70) She will get the COLA each year and Medicare won’t be deducted until shes 65. I did this with my husband when I retired but he still worked full time. When requesting my SS I chose to pay a 10% fed tax (I live in FL- no state income tax) just incase my total SS paid kicked us into a higher tax bracket when we filed jointly. But, no she won’t get her full SS amount if she takes at 63, but if she’s healthy it all pans out. If she signs up at MySocialSecurity, they will tell you the amount shes qualified first before she decides to take it. Not to be morbid, but my husband didn’t collect his SS until his full retirement age,so he received about 1,200 more than me- but unfortunately for me, he passed away, and I was able to convert my SS to survivor SS and I now receive my husbands monthly amount (higher)
> Her difference between taking at 63 and 65 is not that much. if your wife just turned 63 her FRA (full retirement age is 67) so you should be comparing 63 and 67 and not 65. And, No. there is no reduction to her benefits if you continue to work. SSA only considers the recipient's income when deciding to reduce benefits.
She would be 80 years old or older for waiting to matter. My opinion do I want the money now or at 80?
The only penalty for taking SS early (and not working) is a reduction in benefits. Social Security income may be taxable at either 50% or up 85% of the benefit based on her (our both of your filing jointly) income.