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lev-tax
lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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My husband is now 62 years of age, and I am going to be 65

Customer Question

Hello. My husband is now 62 years of age, and I am going to be 65 in August 2016. We have been self employed most of our lives, but are qualified for small amounts of social security benefits. Husband $790/mo and me $838/month at full 66 years. I am wondering about my husband applying early so that I can file for spousal benefits (at my age 66) and then applying myself later. BUT, we own a farming business and do have total income to report and pay taxes on each year. Will the income we make take away all the benefits anyway? What is the best way to try to get the highest social security payment?
Submitted: 6 months ago.
Category: Social Security
Expert:  lev-tax replied 6 months ago.
I am wondering about my husband applying early so that I can file for spousal benefits (at my age 66) and then applying myself later.That option was eliminated and you will not receive spousal benefits and delay your own...Your own benefits will NOT grow if you start spousal benefits - so that would not provide any additional benefits for you.Will the income we make take away all the benefits anyway?You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, the SSA will reduce your benefit. Starting with the month you reach full retirement age, the SSA will not reduce your benefits no matter how much you earn. If you are under full retirement age for the entire year, they deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2016 that limit is $15,720.What is the best way to try to get the highest social security payment?Many people wonder how the SSA figures their Social Security retirement benefit.The Social Security Administration bases Social Security benefits on your lifetime earnings.They adjust or index your actual earnings to account for changes in average wages since the year the earnings were received.Then the Social Security Administration calculates your average indexed monthly earnings during the 35 years in which you earned the most.And after that - they apply a formula to these earnings and arrive at your basic benefit, or primary insurance amount.This is how much you would receive at your full retirement age.So depending on your earning record - it is possible that there are some missing years or earning.Also additional years of earning might increase your benefits.If so - that could affect your social security benefit calculations and you may contact the Social Security Administration and verify if all information is correct.Following publication might be helpful for better understanding the calculations.https://www.ssa.gov/pubs/EN-05-10070.pdfLet me know if that answered your question?
Customer: replied 6 months ago.
No It does not really answer my question. Have they removed all spousal benefits for Aug 24, 1951 and Jan 7 1954 birthdates?
Also, are you saying that waiting past the age of 66 provides no significant increase in benefits? Also I want to confirm that if I file at the age of 66, they can't reduce my benefits even if I still have income over the max. BUT if I file at 65 they will reduce my benefits if I have income. Will this reduction be forever?
Expert:  lev-tax replied 6 months ago.
Hi Sandy,appreciate your reply.Have they removed all spousal benefits for Aug 24, 1951 and Jan 7 1954 birthdates?Spousal benefits are NOT removed - that is not correct interpretation.As a spouse - you may be eligible for spousal benefits that are 50% of what is your spouse entitled.Also, are you saying that waiting past the age of 66 provides no significant increase in benefits?That also is not correct interpretation - you may DELAY your benefits - and have them increase 8% per year.However your intention is to RECEIVE spousal benefits - and in this case - there is no increase.
Expert:  lev-tax replied 6 months ago.
Also I want to confirm that if I file at the age of 66, they can't reduce my benefits even if I still have income over the max.That issue is addressed above - you might overlooked - Starting with the month you reach full retirement age, the SSA will NOT reduce your benefits no matter how much you earn.BUT if I file at 65 they will reduce my benefits if I have income. Will this reduction be forever?Not forever...If you are under full retirement age for the entire year, they deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2016 that limit is $15,720.In the year you reach full retirement age, the SSA will deduct $1 in benefits for every $3 you earn above a different limit, but they only count earnings before the month you reach your full retirement age. If you will reach full retirement age in 2016, the limit on your earnings for the months before full retirement age is $41,880.Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings..Let me know if you need any clarification this matter...I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.

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