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SS while making an income
Old 01-26-2011, 05:52 PM   #1
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SS while making an income

My wife has retired and wants to start SS but I will still bring in a paycheck for the next year. What impact will my income have on her SS payments since we file joint income tax? Also once we are both on SS what impact will cashing in IRAs, Roth IRAs, receiving dividends on stocks, or interest on savings accounts have on SS. I was under the impression that before you are 70(?) you are limited on the amount of income you can make before you lose $1 for every $2 you receive from SS. Just how does this all work?

It was easy to save the money but getting it out to spend without shooting myself in the foot has me confused. Any help would be greatly appreciated for this bear of little brain.

Cheers!
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Old 01-26-2011, 06:06 PM   #2
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This should explain it:

Social Security retirement benefit earnings limit

There is an additional monthly earnings test in the first year of receiving benefits.

How Work Affects Your Benefits

Note also that at FRA her benefits will likely be adjusted higher. If she lives long enough she may recover the amount of the reduction, or even over-recover.
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Old 01-26-2011, 06:09 PM   #3
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This is a complex subject - as you have no doubt realized. It has been discussed in these two threads, but there are others too.

Tax consideration for taxable, IRA & SS revenue streams

Social Security - When to start benefits..
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Old 01-26-2011, 06:30 PM   #4
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I was under the impression that your income doesn't affect your wife's SS benefits at all. Your income would effect you if you were wanting to draw spouse's benefits based upon your wife's record.

My DH is drawing SS benefits and I am working. Because we have children under the age of 16 I could be drawing spouse's benefits but I don't because I still have income from work. Our kids who are under 18 do draw SS benefits based upon my DH's record and their ability to do so does depend on DH's work income (that is, if he worked enough to reduce his SS benefits, it would reduce the kids benefits). It doesn't matter, however, how much I make. Also, if the kids had a part time job their income over a certain amount would reduce their benefits but not their dads (but they are unlikely to have that happen since they would only have low paid part time work).
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Old 01-26-2011, 07:27 PM   #5
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I can't add to what everyone else said. I do want to compliment you on your video, however.

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Old 01-27-2011, 04:19 AM   #6
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Thanks for the replies and the links. They are being very useful and relieving some stress.
As I understand things the key points are:
1. My wife will not be working or getting a salary of any kind so she will recieve her entire SS benefits.
2. Any withdrawls from IRAs or any dividend/interest on investments do not impact SS benefits.
3. Any income that I earn does not impact her SS benefits.

So it appears that she keeps it all.

She turned 64 this month so it looks like she will start the process rolling to get SS. I'll start in 2012 at 63. Neither of us have expectations of making it past 85 but should still be financially OK into our 90s. We are thinking of the "bird in the hand"

Cheers!
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Old 01-27-2011, 12:19 PM   #7
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While the SS benefits may not be reduced, if you have too much income elsewhere, the SS benefits may become taxable, in effect reducing the net amount she receives.
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