Social Security tax implications when one spouse claims early at 62 while higher-earning spouse works until 65

Great question about a common situation! The earnings test for Social Security ONLY applies to the person receiving benefits. Since you're the one claiming and not working, your husband's earnings won't trigger the earnings limit reduction on your benefits - regardless of how you file taxes. The earnings test is individual-specific. However, taxation of benefits is different - it's based on combined income when filing jointly. With your husband earning $92K, it's almost certain that up to 85% of your SS benefits will be subject to income tax. The threshold for joint filers starts at $32,000 (50% taxable) and increases at $44,000 (85% taxable). One thing to consider: if you're planning to claim spousal benefits on your husband's record later (assuming his benefit is significantly higher), taking your own benefit early means you'll be locked into a reduced rate even when you switch to spousal benefits.

You need to RUN THE NUMBERS. We did exactly what ur thinking (wife claimed early, i kept working) and it DESTROYED our retirement plans!!!! The taxes ate up most of her benefit and now shes stuck with a tiny check FOREVER. DON'T DO IT!!!! If you can survive without claiming early DO THAT INSTEAD.

I'm facing the same dilemma! My husband keeps working while I'm thinking about filing at 62 (I'm 61 now). Did anyone actually calculate how much of the SS benefit you'd keep after taxes when it gets added to a working spouse's income? Like actual dollars? I'm trying to decide if it's even worth claiming early if most of it goes to taxes anyway.

I know this is frustrating, but I've spent HOURS on hold trying to get answers from Social Security about this exact situation. If you need to talk to an agent quickly instead of waiting on hold for 3+ hours, check out claimyr.com - I used their service last month to get through to SSA about my spousal benefits question. They have a demo video at https://youtu.be/Z-BRbJw3puU showing how it works. Saved me a massive headache and I actually got clear answers about my specific situation.

Alot of ppl forget that SS has a thing called "deemed filing" now. If ur born after 1954 (which you probably are at 62 now), when u file for any benefit u are DEEMED to have filed for ALL benefits ur eligible for. So if u take ur own benefit now, then later when ur husband files, SSA will only pay u the DIFFERENCE between ur benefit and the spousal benefit. And since ur taking early, that diff will be smaller than if u had waited. So like, if ur full retirement age benefit is 2000 but u take it at 62 for 1400, then when ur hubby files and ur spousal benefit would be 1550 (half his), you'd only get an extra $150 added to ur check. Whereas if u had waited to file until he did, you'd get the full 1550 spousal benefit.

To answer your follow-up question: Yes, there's definitely a way to calculate the lifetime difference. Here's a simplified version: SCENARIO 1 (Claim at 62): - Your benefit at 62: $1,450/month - Estimated taxes (assuming 25% effective tax rate due to husband's income): -$363 - Net monthly benefit: $1,087 - When husband claims at 65 and you become eligible for spousal, you'd get your reduced benefit ($1,450) plus difference to spousal ($100) = $1,550, minus taxes SCENARIO 2 (Wait until husband claims at 65): - You claim spousal benefits when he files: $1,550/month - Taxes would still apply, but you'd have a higher base amount The lifetime calculation depends on your life expectancy. The breakeven point is typically around age 78-82 for most people. If you expect to live beyond that, waiting usually pays more in total benefits over your lifetime. Another consideration: if your husband passes away before you, you'd be eligible for survivor benefits at his full rate. Having your own reduced benefit could impact this as well.

my sister did this exact thing and regretted it SO MUCH!!! she took ss at 62 while her husband worked and when they did taxes, she got hit with this huge tax bill they werent expecting. plus now shes stuck with the smaller amount forever. think really carefully!!!!!

To answer ur question about what happened to us - we didn't understand that we'd lose almost 30% of her benefit FOREVER by claiming early, AND then another big chunk went to taxes because of my income. So she basically gets a tiny check each month that's LOCKED IN FOR LIFE. She could have gotten almost $800 more per month if she'd just waited til her FRA. We've lost tens of thousands of dollars over the years and still have many more to go! That's why I'm saying DON'T DO IT if you can find ANY other way to get by until at least your FRA.

Another thing nobody mentioned: ur Medicare Part B premiums when u turn 65 will be higher if ur joint income is high. So thats another hit if ur husband is still working then. They call it IRMAA (income related monthly adjustment amount) and its a pain.

Has anyone talked to a financial advisor about this? I feel like Social Security claiming strategies are so complicated, especially with married couples with different earning histories. I wonder if it's worth paying someone to run all the scenarios?

Thank you everyone for all the helpful advice and sharing your experiences! I think I've decided to hold off on claiming early and look for other solutions to bridge our income gap for the next few years. Between the permanent reduction, tax implications, and the spousal/survivor benefit considerations, waiting seems to make more financial sense in the long run. I'm going to look into some part-time work options and possibly use a portion of our emergency fund if needed. We might also consult with a financial advisor as suggested to make sure we're making the optimal choice for our specific situation. Really appreciate all the insights - this community has been incredibly helpful!

Smart decision, Emma! You've really thought this through carefully. One additional resource that might help as you explore part-time work options: many states have programs specifically for older workers who've been displaced from their jobs. Since you mentioned being laid off from retail management, you might qualify for programs like AARP's job search resources or your state's workforce development services for workers 50+. Also, if you do decide to consult with a financial advisor, make sure they're fee-only and have experience with Social Security optimization. Some advisors will try to sell you products when what you really need is just the analysis. The National Association of Personal Financial Advisors (NAPFA) has a good directory of fee-only advisors. You're absolutely right that waiting will likely pay off in the long run - especially with your husband's higher earnings record giving you better spousal and survivor benefit options. Good luck with whatever path you choose!

Just wanted to add one more perspective as someone who went through this decision recently. I was in a very similar situation - laid off at 61, husband still working with good income. After reading through all the great advice here, I ended up taking a different approach that might work for you too. Instead of claiming SS early OR completely depleting our emergency fund, I found a part-time job doing bookkeeping from home (leveraged my retail management experience with numbers/budgets). It's only about $18,000/year, but it bridges most of our income gap while letting me delay SS until my FRA. The key was looking at remote work and being willing to take something below my previous salary level. Sites like FlexJobs and Indeed have tons of part-time remote opportunities for people with management experience. Customer service, virtual assistant work, bookkeeping, even retail consulting. This way we keep our emergency fund mostly intact AND I get the higher SS benefit later. Sometimes the middle path between "claim early" and "use all savings" is the right answer. Just another option to consider!

This has been such an informative thread! As someone who's been lurking here trying to figure out my own SS strategy, I wanted to thank everyone for sharing their real experiences - both the successes and the mistakes. Emma, it sounds like you're making a really smart decision to wait and explore other options. The math that Lucas and Grace laid out really drives home how much the early claiming penalty can cost over a lifetime. And Ezra's suggestion about remote work is brilliant - I hadn't thought about how retail management skills would translate to bookkeeping or virtual assistant roles. For anyone else reading this thread in a similar situation, one thing I'd add: don't forget to factor in cost-of-living increases when you're doing your breakeven calculations. SS benefits get annual COLA adjustments, so that higher base amount you get by waiting will compound over time with those increases. Also, if you're considering part-time work to bridge the gap, remember that earning some income (even part-time) can actually boost your SS calculation if it's higher than one of your lower-earning years in their 35-year average. Every little bit helps when you're trying to optimize your retirement income!