SS Question on Earnings and Spousal Benefits

[Tekward]

Does the reduction in SS payments due to earned income effect the spousal benefit?

Assume I am collecting pre-FRA and my spouse gets 35% based on my benefits. It looks like if I earn ~$50K annually my SS monthly benefits are reduced 100% but then my monthly benefit is recalculated at FRA to regain credit for those lost months.

Is this a win/win, where the spousal benefits continue (assuming no spousal income) but my benefit %s continue to grow as if I deferred until FRA?

I guess the key phrase is that your benefits are recalculated at FRA for every month in which you did not receive SOME benefit. Thanks.

 

[VanWinkle]

Does the reduction in SS payments due to earned income effect the spousal benefit?

Assume I am collecting pre-FRA and my spouse gets 35% based on my benefits. It looks like if I earn ~$50K annually my SS monthly benefits are reduced 100% but then my monthly benefit is recalculated at FRA to regain credit for those lost months.

Is this a win/win, where the spousal benefits continue (assuming no spousal income) but my benefit %s continue to grow as if I deferred until FRA?

I guess the key phrase is that your benefits are recalculated at FRA for every month in which you did not receive SOME benefit. Thanks.

Yes it can affect the spousal benefit according to this article.

http://www.investmentnews.com/artic...rnings-limits-can-reduce-spousal-benefits-too


VW

 

[Tekward]

Thanks VW. Great link.

 

[mathjak107]

thanks , that was my question too .

i found out recently that first year collecting follows different rules .

from the point you start collecting if mid year no prior income counts towards the limit , however :

unlike the 2nd year when the yearly earning cap applies , the first year is strictly capped at 1410.00 a month . if you get 1411.00 apparently the month is taken back in full .

it seems crazy that if i collect ss in october and earn 1411 in october ,1411 in november and 500 bucks in december that i would lose 2 out of 3 checks .

yet if i got 1410 , 1410 and 502 i would get them all .

it just seems crazy but that seems to be the first year rule .

i would have thought you would be allowed a total of 1410 x 3 months no matter how it is broken out but apparently not .

i just started collecting and got a form from ss . they wanted to know all the months i got more than 1410 since i started collecting so they can adjust me . they never asked amounts , only if you went over 1410 in any given month .

2nd year it seems to revert to the yearly allowance we all are familiar with ..

 

[VanWinkle]

thanks , that was my question too .

i found out recently that first year collecting follows different rules .

from the point you start collecting if mid year no prior income counts towards the limit , however :

unlike the 2nd year when the yearly earning cap applies , the first year is strictly capped at 1410.00 a month . if you get 1411.00 apparently the month is taken back in full .

it seems crazy that if i collect ss in october and earn 1411 in october ,1411 in november and 500 bucks in december that i would lose 2 out of 3 checks .

yet if i got 1410 , 1410 and 502 i would get them all .

it just seems crazy but that seems to be the first year rule .

i would have thought you would be allowed a total of 1410 x 3 months no matter how it is broken out but apparently not .

i just started collecting and got a form from ss . they wanted to know all the months i got more than 1410 since i started collecting so they can adjust me . they never asked amounts , only if you went over 1410 in any given month .

2nd year it seems to revert to the yearly allowance we all are familiar with ..

I just researched the same question regarding the 1410 per month(1420 in 2018) for my sister in law. She wanted to take SS in January and work til her birthday in June 2018. She thought she would then be under the yearly income rule for take back on her SS. I checked with Mike Piper who wrote a book on SS claiming and even he was confused by the written info on the SS website.

I believe your explanation is true, over 1410 there is take back. I just thought that they would take back 1 dollar for every 2 dollars over the 1410.

I did not know they would take it all back?

Let me know if this is what you meant.

VW

 

[mathjak107]

yes , that is exactly my point . 1st year it looks like go one dollar over the monthly limit and they don't consider you retired and take back the whole check .

 

[VanWinkle]

yes , that is exactly my point . 1st year it looks like go one dollar over the monthly limit and they don't consider you retired and take back the whole check .

You have confirmed that with the SS website or in person?

VW

 

[mathjak107]

You have confirmed that with the SS website or in person?

VW

after receiving the letter to enter my projections on and not having any box to actually enter the amounts i called . they said first year you are only considered retired and they will only pay for each month under 1410 .00 .

i always thought it was a pro-rated cumulative total that you had to stay under . i could have easily gotten paid quarterly instead of monthly .

i would have done better .

luckily i will be fra next year so until fra starting in january i can earn 3740.00 a month .

it says it on the ss website under first year rules ..

The special rule lets us pay a full Social Security check for any whole month we consider you retired, regardless of your yearly earnings. If you will
be under full retirement age for all of 2017, you are considered retired in any month that your earnings are $1,410 or less and you did not perform substantial services in self employment.

reach full retirement age in 2017, you are considered retired in any month that your earnings are $3,740 or less and you did not perform substantial services in self employment.

https://www.ssa.gov/planners/retire/rule.html

 

[VanWinkle]

after receiving the letter to enter my projections on and not having any box to actually enter the amounts i called . they said first year you are only considered retired and they will only pay for each month under 1410 .00 .

i always thought it was a pro-rated cumulative total that you had to stay under . i could have easily gotten paid quarterly instead of monthly .

i would have done better .

luckily i will be fra next year so until fra starting in january i can earn 3740.00 a month .

it says it on the ss website under first year rules ..

The special rule lets us pay a full Social Security check for any whole month we consider you retired, regardless of your yearly earnings. If you will
be under full retirement age for all of 2017, you are considered retired in any month that your earnings are $1,410 or less and you did not perform substantial services in self employment.

reach full retirement age in 2017, you are considered retired in any month that your earnings are $3,740 or less and you did not perform substantial services in self employment.

https://www.ssa.gov/planners/retire/rule.html

Thanks mathjak107 for the info and link. They make it sound like an advantage on the website link, but I agree with you it is a disadvantage!

VW