Hi Larry --

I am 66 (don’t work) and my wife turns 62 in three months (she works). I know from past Q&As that if she applies for social security benefits when she turns 62 I can file a restricted application for a spousal benefit based on her work record and defer taking SS benefits on my own work record until I’m 70. If we do this, and my wife continues to work, will what she earns over the annual limit also reduce my spousal benefit even though I’m older than my full retirement age?

Thanks,
Dave

Hi Dave,

The answer to your question is yes. If your wife files for reduced retirement benefits and you file a restricted application for spousal benefits on her account, both of your benefits will be subject to withholding based on the Social Security earnings test (https://www.ssa.gov/planners/retire/whileworking2.html).

For example, say that your wife's reduced retirement benefit rate at age 62 is $1500 and your spousal rate is $1000. Under the earnings test, the first $16,920 of her earnings this year is exempt, but $1 of benefits would need to be withheld for each $2 of earnings in excess of that. So, if she earned $66,920 for example, $25,000 in benefits would need to be withheld (i.e. ($66,920 - $16,920)/2) before any benefits could be paid. In this example, that would require the withholding of 10 months of both of your benefits before any benefits would be payable.

The maximization software available on this website is programmed to handle earnings test considerations, so you may want to strongly consider using the software in order to explore your filing options and determine your best strategy.

Best, Jerry