Social Security earnings limit penalty based on individual or combined marital income?
I'm planning to claim my Social Security retirement at 63 (about 6 months from now), but I'm confused about the earnings test penalty. My wife will continue working full-time earning around $85,000 annually. I'll probably work part-time making about $25,000. I know there's a penalty if you earn too much before FRA, but I'm not sure if they count just MY income or our COMBINED household income when determining if I've exceeded the limit. My buddy says they only look at the income of the person receiving benefits, but my tax guy mentioned something about household income affecting benefits. Can anyone clarify this? I don't want to get hit with unexpected benefit reductions!
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Isabella Santos
The earnings limit ONLY applies to the person receiving the benefit, not combined household income. Your wife's $85k has no impact on your benefits whatsoever. For 2025, you can earn up to about $22,300 before they start reducing your benefits (they take $1 for every $2 you earn above the limit). So at $25k, you'd be about $2,700 over, meaning they'd withhold around $1,350 from your annual benefits. Your tax guy was probably talking about how combined income affects the TAXATION of benefits, which is a completely different issue from the earnings test.
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Malik Johnson
•Ahh that makes sense! So they'll only look at MY income for the earnings test. Thanks for clearing that up. I was stressing thinking we'd lose most of my benefits because of our combined income. If I earn $25k, they'd only withhold about $1,350 for the year? That's not nearly as bad as I feared!
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Ravi Sharma
You might wanna wait till FRA anyway. That's what my brother did and he gets way more money every month. The penalty goes away completely when you hit full retirement age too.
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Isabella Santos
•That's true - at Full Retirement Age the earnings limit disappears completely. But it's worth noting that any benefits withheld due to the earnings test aren't permanently lost. When you reach FRA, Social Security recalculates your benefit amount to give credit for months when benefits were withheld. So you eventually get that money back in the form of a higher monthly benefit after FRA.
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Freya Larsen
The SSA only looks at YOUR income for the earnings test, not your spouse's. But remember that if you file taxes jointly, your COMBINED income DOES affect how much of your Social Security gets taxed! Up to 85% of your benefits can be taxable depending on your provisional income. My husband and I learned this the hard way last year when we got hit with a big tax bill we weren't expecting. The earnings test and benefit taxation are two completely different things that people mix up all the time.
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Omar Hassan
•exactly this!!!! ppl always confuse the earning limit (which is JUST YOU) with the tax stuff (which is BOTH OF YOU). my sister got so confused about this and almost didnt take her ss early bc she thought her husband's income would reduce her check. it doesn't!!!
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Chloe Taylor
I recently had to deal with this exact situation. The earnings test is INDIVIDUAL only. For 2025, the annual limit will be approximately $22,300 (they adjust it yearly for inflation). Since you'll make about $25,000, you'll be $2,700 over the limit. SSA will withhold $1 for every $2 you exceed the limit, so about $1,350 would be withheld from your annual benefits. Your wife's income has absolutely zero impact on the earnings test for your benefits. Where combined income DOES matter is: 1. Taxation of benefits (up to 85% of your SS can be taxable based on combined income) 2. Medicare IRMAA surcharges (higher premiums if joint income exceeds certain thresholds) But neither of these affect your actual benefit amount - just taxation and Medicare costs.
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Malik Johnson
•Thank you for the detailed explanation! Is there an easy way to estimate how much they'll actually withhold each month? Will they just reduce each monthly payment by a little bit, or will they withhold entire checks until they've collected the penalty amount?
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Chloe Taylor
•They typically withhold full months of benefits at the beginning of the year until they've collected the estimated penalty amount. You'll need to complete an annual earnings estimate form so they can calculate how much to withhold. For a relatively small withholding like yours (about $1,350), they might withhold 1-2 months of benefits depending on your monthly benefit amount. After they've withheld the penalty amount, your regular monthly payments would resume for the rest of the year.
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ShadowHunter
When I tried to call SSA to ask about this same question last year, I spent THREE DAYS trying to get through to someone! Kept getting busy signals or disconnected after waiting for an hour. Finally I found this service called Claimyr (claimyr.com) that got me connected to an SSA agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed what others here are saying - only YOUR income counts for the earnings test, not your spouse's. My wife makes almost $100K and it has zero effect on my retirement benefits. Just thought I'd mention Claimyr since it saved me days of frustration trying to get through on my own.
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Ravi Sharma
•does that actually work? i tried calling ssa like 6 times last month and gave up
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ShadowHunter
•Yeah it does work. I was super skeptical too but was desperate after days of trying. They connected me to an actual SSA agent in about 15 minutes. WAY better than the hours I wasted trying to get through on my own. The agent I talked to was really helpful with explaining all the earnings test details too.
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Diego Ramirez
WAIT! Everyone saying the earnings test is only based on individual income is correct BUT there's a special rule for the first year you retire that you need to know about! If you're retiring mid-year, SSA applies a monthly earnings test rather than annual. Once you officially "retire" (earn below the monthly limit), they don't count your earnings from before retirement. The monthly limit is the annual limit divided by 12, so about $1,858/month for 2025. This could potentially save you from any withholding if you plan your retirement date carefully! Also, if you're going to earn over the limit, you should report this to SSA in advance rather than letting them discover it later and demand repayment. They WILL find out when tax info is reported.
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Malik Johnson
•That's really good to know about the monthly test for the first year! If I understand right, I could work full-time until June making $4k/month, then officially "retire" and keep my part-time job making $1,500/month after that, and they would only apply the test to the months after June? That might work better for me since I was planning to reduce my hours in the summer anyway.
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Diego Ramirez
•Exactly! If you "retire" in June and make less than the monthly limit ($1,858) for the remainder of the year, SSA will pay full benefits for July through December regardless of how much you earned January through June. Just make sure you notify SSA that you've "retired" so they apply this rule. This special rule only applies for the first year of retirement - after that, they'll use the annual test. Make sure to report your expected earnings to SSA when you apply for benefits so they can adjust withholding appropriately.
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Omar Hassan
My husband went thru this last year and the SSA people told him the earnings test ONLY looks at the person getting SS!!! has nothing to do with spouse income!! they took like $1 from his benefits for every $2 he went over the limit. but they took entire checks at the beginning of the year then started paying normal after they took enough.
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Freya Larsen
Since you're planning to start benefits at 63, keep in mind that your benefit will be permanently reduced by approximately 25% compared to waiting until your Full Retirement Age (which I'm guessing is 67 based on your age). Adding the earnings test reduction on top of that means you'll get significantly less than your full benefit amount. Have you done calculations to determine if it might be better financially to either: 1. Continue working at your current income level and wait until FRA to claim, or 2. Fully retire now (or reduce your income below the earnings limit) to avoid the penalty? Sometimes the math favors one approach over the other depending on your specific situation. The earnings test reduction gets paid back eventually after FRA, but the early claiming reduction is permanent.
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Malik Johnson
•I've thought about waiting, but I have some health concerns that make me want to claim earlier. My dad and his brothers all died before 75, so I'm not convinced waiting is the best option for me personally. I'd rather have the money while I can still enjoy it, even if it's a bit less. But you make a good point about possibly reducing my hours to stay under the limit - that might be the best compromise.
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