Will My Earnings Cause My Wife To Be Subject To The Earnings Test?

Jul 2 2017 - 8:01am

My wife will be 69 in July 2017. She is considering beginning to take Social Security Retirement Benefits based on her earnings record (so she will be past Full Retirement Age when she begins to receive her Social Security Retirement Benefits). I will be 62 in July 2017 and plan to begin to take my Social Security Retirement Benefits when I turn 70. When I begin to take by benefits, my wife will switch to taking a Spousal Benefit because 50% of my benefit at Full Retirement Age will be more than her benefit based on her earnings.
We have a question regarding the Earnings Test: My wife is past her full retirement age, but I am not. She is not working today, but I am working and make enough to trigger the earnings test (if it is applied to me rather than to my wife). We file a joint federal income tax return. Will my working cause my wife's benefits to be subject to the Earnings Test? Again, she is past Full Retirement Age, but I am not (not for another 4 years and 4 months). Is the Earnings Test applied on the Spouse receiving Social Security, or on the couple if they file a joint federal tax return?


First off, if your wife's own retirement benefit rate would be less than 50% of your full retirement age rate (PIA) even if she waits until age 70 to file, she would almost certainly be better off taking her own benefits as soon as possible. This is because when you eventually file for your benefits, she will only be able to receive the higher of her own benefit rate or 50% of your PIA. You should strongly consider running the maximization software on this website to determine the best filing strategy for you and your wife.

Your earnings would have no effect on your wife's ability to draw her own retirement benefits. And, whether or not a couple files a joint tax return has no bearing on the earnings test (https://www.ssa.gov/planners/retire/whileworking2.html). However, your income would be considered in determining how much if any of your wife's benefits are counted as income for tax purposes if you file jointly. For basic information on the taxation of benefits, refer to Social Security's website: https://www.ssa.gov/planners/taxes.html.

Best, Jerry