Neither my husband nor myself have applied for benefits yet.

I am 62 yrs and 1 month DOB 5/27/1959.
My current SS Benefit would be $818.00 per month.
My benefit at FRA would be $1286.

My husband is 67 yrs and 6 months, DOB 12/28/1953.
His current benefit would be $2100 per month.
His Benefit at 70 yrs of age would be 2600 per month.

If I apply for my benefit now and continue to work until FRA and I earn approx.. $47k per year for the next 5 years until FRA AND my husband applies for restricted Spousal benefit now, so he can let his own SS Benefit grow until he reaches 70 yrs old when he would switch to his own benefit, I am assuming I would not receive any of my benefit since I will be earning far above the max of $18,960 and the $1 for every $2 earned over that amount would be withheld to be added back to my monthly benefit.
But, my husband, since he is past FRA, would receive the $643 per month without reduction until he turns 70 years of age and applies for his own benefit that has maxed out at @ $2600 per month since he waited.
At my FRA when I begin to receive my benefit, which would then be adjusted by the amounts that were withheld,
1. is it worth it to apply now so my husband can receive the $643 per mo. For the next 2.5 years?
2. How will it affect my option of receiving a spousal benefit based on my husband’s earnings at my FRA if half of his benefit is more than mine based on my own work record?
3. How will it affect my future benefit should my husband pass away before me?

Thank you,
Kathryn

Hi Kathryn. Here's the problem with your plan. The withholding of benefits caused by Social Security's earnings test applies not only to the worker's benefits, but also to any auxiliary (e.g. spousal) benefits payable on the worker's record. So, if you earn in excess of the exempt amount of $18,960 this year, Social Security will withhold both your benefits and your husband's spousal benefits for as long as it takes to cover the required withholding amount.

Based on the figures in your question, if you earn $47,000 this year and if you earn over $1580 in all months,, neither you or your husband could collect any benefits from your account in 2021. The total monthly amount that you say that you and your husband would be eligible for if you file this month is $1461 (i.e. $818 + $643). There are 7 months left in the year (i.e. June through December), so the total amount of benefits potentially payable on your account in 2021 is apparently $10,227 (i.e. 7 x $1461). If you earn $47000, Social Security would need to withhold $14,020 before paying any benefits from your account in 2021 (i.e. ($47000-$18960)/2). And, since the amount that would need to be withheld exceeds the amount potentially payable, that means neither you or your husband could be paid any benefits from your account in 2021 based on your figures.

But, if you apply for benefits effective with January 2022 and if your husband claims spousal benefits at that time, then you and your husband could likely be paid at least some benefits towards the end of the year. Social Security would withhold both of your benefits for as many months as it would take to cover $1 of benefits for each $2 of your excess earnings. And, if you again earn $47K next year then 10 months of withholding should cover the necessary amount. That would likely allow you and your husband to be paid your monthly benefit amounts for November and December 2022.

The only real downside of the above strategy is that your benefit rate will be permanently reduced for any months for which you're paid benefits prior to your full retirement age (FRA). Social Security would adjust your permanent rate after you reach FRA to remove the reduction for any months that you aren't paid benefits due to your earnings, but you'll be stuck with a reduction for any months that you do get paid prior to FRA.

It doesn't sound likely that you would ever qualify for spousal benefits regardless of when you apply for benefits. Unreduced spousal benefits are based on 50% of the worker's primary insurance amount (PIA), and since your own PIA is apparently more than 50% of your husband's PIA, you wouldn't be eligible for spousal benefits now or in the future. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

However, if your husband dies before you and after you've reached FRA, you could be paid the higher of your own benefit or your husband's benefit rate, inclusive of any delayed retirement credits that he earns by waiting past FRA to collect his own benefits. So, if your husband starts drawing at age 70 and then dies before you, you could be paid his full age 70 amount as a survivor. That's true even if you started drawing your own benefits prior to FRA. You couldn't be paid both your own benefit and your husband's full amount at the same time, though, just a total of the higher of the 2 amounts.

It sounds like you and your husband should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze all of the various options available to you in order to determine your best strategy for maximizing your benefits.

Best, Jerry