Does Spouse’s Income Affect Social Security Benefits?

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For some people, it makes sense to start drawing Social Security benefits before reaching full retirement age (FRA). But there are restrictions that attend this decision to draw benefits early.

The Social Security Administration considers the act of drawing benefits as retirement. This means that recipients are restricted as to how much additional income they can earn while drawing benefits before reaching FRA. But if you’re married, does your spouse’s income apply to this limited income?

Full Retirement Age Depends on Birth Year

Social Security’s full retirement age depends on what year you were born. For instance, if you were born between 1943 and 1954, your FRA is 66. But if you were born in 1960 or later, your FRA would be 67. But you can start receiving Social Security at 62 at a reduced rate. There is a restriction to retiring early.

Extra Income Restricted Before FRA

If you retire before FRA, you are limited as to how much income can be earned above and beyond Social Security benefits.

In 2022, the limit is $19,560 per year. There is a penalty if you go over this limit. One dollar in benefits is deducted for every three dollars you earn above the limit.

The additional earnings are only counted up to the month before you reach FRA.

Spouse’s Income Doesn’t Affect Limit

If you start collecting benefits before full retirement age, you must watch how much additional income is made. But what about your spouse? If he or she is earning income, does that count toward your limit? In other words, does Social Security count both spouses’ incomes together? Under this scenario, no.

If you are collecting your own Social Security benefits before FRA, your spouse’s income doesn’t affect your limit. Regardless of your spouse’s earnings, they can make their salary without hindering your Social Security benefits.

Spousal Benefits Affected by Income

A spouse not drawing their own benefits but receiving spousal benefits is a different scenario. For instance, a person becomes reaches FRA and starts drawing spousal benefits. Their spouse isn’t at full retirement age yet and also starts drawing Social Security retirement benefits.

The person’s benefits who is not at FRA is subject to the $19,560 additional income limit. If they go over that limit, they will be penalized. In addition, the spouse receiving spousal benefits will also be penalized.

In this scenario, Social Security does combine the benefits of both spouses.

No Marriage Penalty for Social Security Retirement

If you and your spouse have worked and earned enough credits individually, you are each qualified for a Social Security benefit when you retire. This is done on an individual basis, regardless of what amount either one of you are paid.

Spouse Receives Higher Benefits

A married couple is due benefits based either on their own work record or spouse’s record. You must file for both your own and your spouse’s benefits. But you will receive only one benefit. In other words, you are eligible to receive half your spouse’s benefit or your own benefit. It depends on which one is the higher amount.

For instance, if your spouse receives $3,000 a month, half would be $1,500. If your individual amount is only $1,200, then you are able to receive the $1,500 in lieu of the individual amount due to you.

Not All Income Counted

Fortunately, Social Security doesn’t count all your income. It only counts employer wages or net earnings if you’re self-employed. It doesn’t count pensions, interest, dividend income, investment earnings, or capital gains.

Spouse Doesn’t Affect Benefits When on Disability

Social Security Disability Insurance (SSDI) is designed to help individuals and families when an individual can’t work. You can’t work when on SSDI. But can your spouse work?

Your spouse can work while you receive SSDI. That’s because your benefits are based on your work record, not your spouse’s record.

To collect benefits, you must have paid Social Security taxes on your earnings, have worked recently enough, and have worked long enough.

Spouse Income Affects Supplemental Security Income

The Social Security Administration provides benefits to individuals with limited assets and income. This is Supplemental Security Income (SSI). On your own, you may be eligible to collect SSI. But your spouse’s income will be factored in to show you have less need.

The substantial gainful activity (SGA) is $1,350 per month for 2022. For blind people, the SGA is $2,260 per month.

No Penalty for Social Security Retirement and Disability

There is no penalty for your individual Social Security benefits if your spouse exceeds the income level of early retirement. Your benefits are based on your work record, not jointly with your spouse’s. The exception is if you are collecting spousal Social Security benefits.

If you are on disability, you receive benefits based on your work record, not your spouse’s. So, your spouse’s income doesn’t affect you.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.