Ask Larry: ​​​​​Can I Really Earn Any Amount With No Deductions To Social Security?


Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s column addresses the earnings test and deductions, restricting an application to spousal benefits only, survivor benefits and remarriage, whether to file and suspend at full retirement age and the effects of filing early versus delaying. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.

See more Ask Larry answers here.

Ask Larry about Social Security:

Can I Really Earn Any Amount With No Deductions to Social Security?​​

Hi Larry, A friend just showed me something from Social Security stating that in 2018 if I am 66 or older, it won’t matter how much money I make because Social Security will not take money from my benefit. Is that true? I filed at 62 and I had too much money as earned income and .so I had an earnings deduction taken out. What about now? Thanks, Allan

Hi Allan, I often cringe when people pass along second- or third-hand claims about Social Security but in this case, it’s true that starting with the month that you reach full retirement age (FRA), you can earn any amount without losing any of your Social Security benefits. Social Security could still make deductions from your benefits for other reasons, though, such as to recover a previous overpayment or for Medicare premiums. Best, Larry

Can I File For Spousal Benefits And Take My Own Social Security At Age 70?​​

Hi Larry, I think I suspended my Social Security at 62. Is this something I actually could have done? I am now 66. I was born in 1951. My wife was born in 1954. Can I suspend my social security? My wife will begin to take her Social Security retirement benefit soon and I will take my a spousal benefit. I will take my own Social Security retirement benefit at 70. Can I do this? Thanks, Bill

Hi Bill, You can’t voluntarily suspend your benefits prior to full retirement age (FRA), so you couldn’t have suspended your Social Security at 62. As long as your wife is drawing her retirement benefits and you haven’t yet filed for benefits on your own record, you could file a restricted application for spousal benefits only and allow your own benefit rate to grow until 70. However, if you’ve already filed for your own retirement benefits you couldn’t draw full spousal benefits even if your benefits are in suspense, unless you are able to withdraw the application that you filed on your own record.

You and your wife may want to use an expert Social Security benefits calculator, such as Maximize My Social Security or some other top quality program, to determine your best overall filing strategy. Best, Larry

Would I Be Able To Receive Widow’s Benefits On My First Husband’s Record If My Second Husband Passes Away?​​

Hi Larry, I am 57 and a widow. I’m considering remarrying. My potential future husband is a civil service retiree and does not receive Social Security. I did not work much outside of the home thus my Social Security retirement benefit is minimal. If after my remarriage, my second husband passes away, can I receive a widow’s benefit at my full retirement age? Would I have a penalty because of my remarriage? Thanks, Linda

Hi Linda, Yes, it sounds like you could potentially qualify for widow’s benefits on your first husband’s record in the future if your new marriage ends in death or divorce. There would be no penalty for having remarried other than the fact that you wouldn’t be able to draw widow’s benefits while your new marriage is in effect, assuming that the remarriage occurs prior to when you turn age 60. Best, Larry

Is There Any Reason To File And Suspend At FRA Instead Of Waiting Until Age 70 To File?​​

Hi Larry, I have read your very informative book. I am turning 66, was married for under 10 years, and have no dependents. I have the resources to delay taking my Social Security benefits until I turn 70. Is there any financial or other advantage to doing that over filing and suspending at 66? Conversely, is there an advantage or benefit conferred by filing and suspending at 66 over filing at 70? I understand about the effect on Medicare payments. Thanks, Sheryl

Hi Sheryl, In your case, the only meaningful difference between filing for and suspending benefits at full retirement age (FRA) vs. simply waiting until age 70 to apply is the potential effect it would have on your ability to change your mind and start drawing benefits sooner. If you file for and suspend your Social Security retirement benefit, the earliest you could start drawing your benefits is the month after the month of your request for reinstatement. On the other hand if you simply wait to file, you would have the option of claiming up to six months of retroactive benefits when you do eventually file an application. If you did this, you’d of course lose the delayed retirement credits (DRCs) you had earned for those six months.

There are other potential disadvantages to filing for and suspending your benefits at FRA, but those wouldn’t affect you since it sounds like you couldn’t qualify for benefits on anyone else’s record. Prior to 4/30/2016 there were circumstances in which it was advantageous to file for and suspend benefits, but the Bipartisan Budget Act of 2015 changed all of that Best, Larry

Is There A Benefit For Me To Wait To Claim Benefits If I’m Not Working?​​

Hi Larry, My job was recently eliminated and I am considering just retiring. Is there still a benefit for me to wait and claim my Social Security at my full retirement age (FRA) of 66 and 2 months) since I am not working if financially I am able to do so? I am now 62 and 2 months. Thanks, Sarah

Hi Sarah, Yes. If you start drawing your Social Security retirement benefits at age 62 & 2 months, your benefit rate will be about 25% lower than if you waited until (FRA to file. This is true even if you stop working at age 62. Before filing, you might want to take advantage of an expert Social Security benefits calculator as described in other answers to compare your options and determine your best filing strategy. Best, Larry

To learn more about your Social Security options, visit Economic Security Planning, Inc.

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