Whose Work Affects Your Social Security Benefits?

Often I am asked the question, “Will my spouse’s work affect my Social Security benefits?”

The answer is usually no, but it could be different in one specific circumstance, I’ll discuss last.  To be clear, we are talking about the withholding of Social Security benefits due to earnings over the allowable earnings limit.  Most people realize that if you start receiving Social Security retirement benefits before you reach full retirement age and work, you must stay under an earnings limit to retain all of your benefits.

Many people are inquiring about an earnings situation where one spouse is still working fulltime and one spouse is retired. The retired spouse is receiving Social Security retirement benefits. The retired spouse wonders whether the wages of their currently working spouse could affect their retirement checks. The answer is no.

Some people are asking the question about a situation where both members of a married couple are retired and both are receiving Social Security benefits. They each receive Social Security retirement checks because of their own work where they paid F.I.C.A. tax on the wages before they retired. When each spouse receives benefits because of their own work, the answer is no. The working (but receiving Social Security checks) spouse’s wages do not affect the other spouse’s Social Security retirement checks.

Some people are asking the question about a situation where both spouses are retired and receiving Social Security checks. Both spouses are receiving benefits because of one worker’s payment of F.I.C.A. wages before they both retired. Let’s call them Tom and Sally. Tom worked and earned 40 work credits to provide a retirement benefit for himself and a spouse’s benefit for Sally. (Sally did not work outside the home and did not have a Social Security benefit based on her own earnings, so she can only receive a spouses benefit based on Tom’s former work from Social Security.) In this situation, if Tom is under his full retirement age and takes a job where he earns over the allowable amount, his earnings may affect Sally’s checks as well as his own. When a retired beneficiary under full retirement age earns over the allowable amount ($16,920 for 2017 and $17,040 for 2018), Social Security withholds $1 for every $2 in earnings from his or her check. If Tom earns $1500 over the limit for 2017, Social Security would withhold half of that amount or $750 in benefits.  In this case, because Sally gets her benefit because of Tom’s F.I. C.A. covered earnings paid before retirement, Sally’s monthly benefits can also be used to withhold the $750.  As an example, let’s say Tom has a monthly benefit of $500 and Sally has a monthly benefit of $250.  Together, they have $750 in monthly benefits. He and Sally each would have one check withheld which together totals $750.  They would both receive checks for all the other months in the year. So, in this particular situation, because Tom’s work provided Sally’s monthly Social Security benefit, Tom’s earnings over the allowable limit affect Sally’s benefits also.

When you initially apply for retirement benefits, Social Security asks you if you will continue to work.  We explain the effect of any future earnings you tell us about at that time.  We also remind you that if what you told us about your future earnings changes (you will go over the allowable annual limit and you are under full retirement age) to report the change to us, so we can adjust your checks.  We explain the effect of the earnings and send you a letter about the earnings. Reporting as soon as you return to work and know you will exceed the limit is the best way to maintain a good understanding of how work and earnings may affect you and your spouse’s benefit.

For more information about working and receiving benefits, visit our website at www.ssa.gov/planners/retire/whileworking2.html, www.ssa.gov/OACT/COLA/RTeffect.html, and www.ssa.gov/pubs/EN-05-10069.pdf.