I visited my local Social Security office recently. I'm 62 and considering starting my reduced benefits next month when my husband turns 66 and I'm 62 1/2. He is the higher earner and my plan is for him to make a Restricted Application and collect spousal benefits on my earnings for 3 1/2 years while delaying filing for his own benefits until he is 70. I asked what would happen if I exceeded the $15,700 earnings limit where all or part of my benefits would stop. We agreed that in this case I wouldn't lose anything as my payment would be adjusted at FRA. But, I was told that if my benefits stopped fully or partially because I exceeded the earnings limit, my husband's spousal benefits would stop too. Is this correct? If I go slightly over the $15,700 (say $25,000 net self employed income), will his spousal benefits be reduced or eliminated? Also, can we both resume our respective benefits if I'm under the earnings limit the following year?

Hi,

Yes, what you were told is correct. The actual exempt amount this year is $15720 (https://www.ssa.gov/planners/retire/whileworking2.html), and I'll explain with an example.

Say your reduced monthly benefit amount is $1240 and your husband's spousal benefit on your record is $800. If you earn $25,000, your excess earnings would be $9,280 (i.e. $25000-$15720), requiring $4640 (i.e. $9280/2) to be withheld from the benefits payable on your record. So, in this example, Social Security would need to withhold both your and your husband's benefits for 2 full months, plus part of a 3rd month in order to withhold the amount needed. Social Security withholds benefits in advance based on your estimated earnings, and refunds any excess withholding when your actual earnings are established. If you underestimate, any overpayment is withheld from your future benefits.

The annual earnings test is applied on a calendar year basis, so if you are only over the limit in one year, that's the only year you'd lose any benefits. Also, the earnings limit is higher in the year you reach full retirement age (FRA), and no longer applies effective with the month of FRA attainment.

Best, Jerry