Can my wife claim Social Security at FRA while I'm working with 7-year age gap? Tax implications?

Yes, your wife can absolutely claim her retirement benefits at her full retirement age regardless of whether you're still working. Her claiming decision is completely independent of your employment status. The taxation question depends on your combined income. For married couples filing jointly, if your combined income (adjusted gross income + nontaxable interest + half of Social Security benefits) is between $32,000 and $44,000, up to 50% of benefits are taxable. Above $44,000, up to 85% of benefits may be taxable. With your income at $110,000 plus her potential benefits, you'd likely have 85% of her benefits subject to taxation.

Just FYI your wife can get delayed retirement credits if she waits past FRA to file. That's 8% per year increase up until age 70. So if she waits 3 more years she could get 24% more!! Something to think about... my sister waited til 70 and gets way more than her friends who took SS early. But everyone's situation is diffrent.

There are a few important considerations beyond just the tax implications: 1) Your wife can earn Delayed Retirement Credits (DRCs) of 8% per year for each year she delays beyond her FRA up to age 70. This would permanently increase her monthly benefit. 2) With your age gap, if your own benefit will be higher than hers, there's a survivor benefit consideration. If you predecease her, she would receive your benefit amount as a survivor if it's higher than her own. So maximizing your benefit through delay might be more important than maximizing hers. 3) On taxation: Yes, with your combined income, about 85% of her benefits would be subject to your marginal tax rate. However, the actual tax impact depends on your specific tax bracket. 4) One strategy worth considering: If she files now, she gets benefits for 7 years before you reach your FRA, which provides income now rather than waiting for a larger amount later. The optimal choice really depends on your specific financial situation, health/longevity expectations, and retirement plans.

MY WIFE AND ME HAD SIMILAR SITUATION!! She was 5 yrs older than me and took SS at her FRA. Yes they taxed us on 85% of her benefits because of our income. But we needed the $$$ for medical bills so it made sense for us. No regrets even with the taxes.

Everyone's talking about taxes but missing an important point - if your wife worked less years than you or earned less, she might be entitled to spousal benefits based on YOUR record once you file for benefits. Those could potentially be higher than her own retirement benefit. She might want to take her own benefit now, then switch to a spousal benefit (if higher) when you file. But I'm not 100% sure if that's still allowed with the new rules.

i tried calling SS 6 times to ask almost the same question for my situation but could never get thru!! so frustrating. they put u on hold for hours then hang up. does anyone know a better way to actually talk to a real person there?

One thing nobodys mentioned - if your wife works while collecting SS and she's at FRA, she won't have any benefit reduction no matter how much she earns. Only people under FRA have the earnings limitation where SSA withholds benefits. Something to consider if she wants to work part time?

The tax situation depends on your state too! Some states like NM, UT, VT tax Social Security benefits while others like FL, TX, WA have no state income tax at all. Where do you live? That could make a big difference in your calculations.

Since no one has mentioned it yet - you might want to run some actual numbers on the break-even analysis. If your wife claims at 67 versus waiting until 70, she'll need to live until approximately age 82-83 to break even (where the total benefits received by delaying equal what she would have received by filing at 67). Any years beyond that break-even point would favor delaying. Given that a woman who reaches 67 has an average life expectancy into her mid-80s, statistically delaying often makes sense, even accounting for the taxation of benefits.