Mailbag: Reduction of Social Security Spousal Benefits

answers to social security questions

A reader asks a question about the reduction of Social Security Spousal Benefits


Will my spouse’s Social Security benefits be reduced?

My spouse began collecting her Social Security benefits at age 64. I plan on retiring at 67, later in 2017. When I retire, I will begin collecting SS on my earnings. The plan is to have my wife switch from collecting on her earnings to collect half of mine because mine is greater. Will she be able to collect half of my benefit, or will her benefit be reduced because she started collecting early on her earnings?


Good question! It would seem relatively straightforward, but then again…we’re dealing with the Social Security Administration.

Here’s the short answer:

Your wife’s spousal benefit is actually comprised by two separate benefit payments. First, there is her own benefit. Second, she has the ‘spousal top off.’ She becomes eligible for her own benefit at age 62, and eligible for the spousal benefit when you file for your own benefits.

Here’s how it’s calculated.

Her FRA benefit is compared to 50% of your FRA benefit. If hers is less than that number, it is ‘topped off’ to bring the total up to 50% of yours. Since she filed early, her own benefit will be reduced. However, the spousal top off will not be reduced if you file for your own benefits at or after her full retirement age.


In order for her to receive a spousal benefit from your work record there is a trigger…you must file for your benefits. If you haven’t filed, she isn’t eligible to collect from your record.  Once you file, she becomes eligible for a spousal benefit and her reduction for filing age is determined at her date of first eligibility. If she is full retirement age when you file (and she thus become eligible), there is no reduction.

Hope this helps!

Mailbag: Reducing Taxes By Choosing When To File For Social Security

answers to social security questions

A reader wants to know when he should file for Social Security in order to pay the least amount of retirement tax.


Should I retire at 66 years old and use my IRA for income before taking Social Security? My retirement income will come from my pension, RMD, Social Security and rental. I am a conservative investor. My RMD annual income at 4% will be the biggest piece of the pie. My gross retirement income will be more than my taxable income while employed. I don’t want to pay extra taxes. What should I do?


I don’t blame you for not wanting pay extra taxes! When viewed through a long term perspective, taxes in retirement may be one of your greatest single expenses. Although your tax advisor is the best resource for recommendations on an overall tax reduction plan, there is one strategy that is really easy and often overlooked…it could be as simple as structuring your income properly.

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Mailbag: Gross vs. Net Wages for the Social Security Earnings Limit

answers to social security questions

A reader wants to know what earnings will count towards the Social Security income limit.


I am 65 years old and went back to work 3 days a week and draw social security. My taxable income for 2 weeks is $1063, I now am taking $160 out of my check at putting in my Ky deffered account and now my taxable income is $904. My question is what amount is counted toward my limit of $15,720.


This is a great question! When the Social Security Administration defines which earning count towards the income limit, they will use the general terms “wages” and “net income from self-employment.” If you’re not self-employed, this leaves many to wonder if the countable wages are gross (before deductions) or net (after deductions).

I had this same question at a recent webinar.  A participant in California was earning $28,000 per year in part time work. She was contributing $15,000 to her 401k. Her question was very similar to yours. “Will they consider me to have earned $28,000 or $13,000?” I didn’t have to dig far to find the definitive answer. You can see this too in the Social Security’s piece “How Work Affects Your Benefits.”

“We do count an employee’s contribution to a pension or retirement plan, however, if the contribution amount is included in the employee’s gross wages.”

 That’s pretty clear. The amount of income used to determine whether or not you are subject to the earnings test is your gross wages.

Something else about your question that stood out to me was that you are currently 65 years of age. In my article The Social Security Earnings Limit and Working In Retirement, I discuss how the earnings limit The Social Security earnings limit is split into two categories.

1) Earnings when you are age 62 through January 1 of the year you attain full retirement age

2) Earnings after January 1 of the year you reach full retirement age

In the first category, the limit is $15,720. If your earnings exceed that amount, the Social Security Administration will withhold $1 for every $2 over the limit.

The second category begins on January 1 of the year you attain full retirement age. During that period you can earn $41,880 before the Social Security earnings limitation is applied. If you go over that amount, they will withhold $1 for every $3 over the limit.

So, if you are turning 66 this year, your current Social Security benefit may not be subject to the earnings limit at all.

If you are subject to the earnings limitation, I would suggest not waiting for the Social Security Administration to cut off your benefit. Instead, I’d recommend that you voluntarily suspend benefits. If you wait on them to cut you off, your risk of an overpayment notice is higher.

In any case, if your benefits begin to be withheld because you are making too much, don’t worry…you aren’t missing payments that you’ll never get back. The Social Security Administration will simply recalculate your benefit amount at your full retirement age (or when you stop working) to reflect the months that benefits were withheld.

I hope this helps!

A note for all readers

First, thanks for being a loyal reader and supporter of my blog! I’m continually amazed at the month over month increase in visitors.

As the number of readers increase, so do the emails I receive. Most of these questions are from visitors who have a Social Security issue and cannot find the help they need. Since I think solid Social Security advice is so important, I have tried to answer every email that I receive. However, I simply can’t keep up. The quantity of incoming email has just gotten too high.

That stinks because I love interacting with my readers and answering Social Security questions!

In the future I’ll continue to answer as many questions as possible. The questions and answers that’ll have priority are those that may benefit a wider audience. I’ll answer the question and then publish the Q&A on my blog. (Don’t worry, I’ll change up enough personal details so you’ll stay unknown.)

If you want to make sure I answer your question, I am still accepting individual consultations. You can click HERE for more information on booking.

Thanks for reading!

Mailbag: Trigger for The Government Pension Offset

answers to social security questions

This reader had a question about avoiding the Government Pension Offset for as long as possible.


Enjoyed your informative article (“Your Social Security and Retirement Benefits”) in the latest issue of ATPE News magazine.

I am an ex-serviceman (24-year career, US Army), currently a teacher, and will not be affected by the WEP when I retire and begin collecting my TRS pension.

I do have a question about the GPO:  Can a spouse who is paying into TRS, not retired, and at FRA (under Social Security rules) apply for a spousal support benefit (under SS) when her husband who is at FRA applies for SS benefits?


I like this kind of question. It makes me think!

What I’m pretty sure you’re asking is this: If you are not receiving your pension from non-covered work, does the Government Pension Offset apply?

The simple answer is…NO!

If you are still working and your spouse has filed for benefits, you can file for and receive a Social Security benefit that is not affected by the Government Pension Offset. Enjoy it while it last. Once you retire, your Social Security benefit will get reduced by 2/3 of the amount of your TRS pension.

A note for all readers.

Over the past few years, I’ve found that most Social Security questions can be answered with an understanding of just six  simple Social Security basics. I cover these basics in a 100% free report that you can download by clicking HERE.

If you still have questions after reading this report, send me an email.  I can’t promise that I’ll respond individually, but I love interacting with my readers and answering Social Security questions! The questions and answers that’ll have priority are those that may benefit a wider audience. I’ll answer the question individually and then publish the Q&A on my blog. (Don’t worry, I’ll change up enough personal details so you’ll stay unknown.)

If you want to make sure I answer your question, I am still accepting individual consultations. You can click HERE for more information on booking a call with me.

Thanks for reading!


Mailbag: Switching from Disability to Retirement Benefits

answers to social security questions

A reader has a question about the suitability of switching from Social Security disability benefits to Social Security retirement benefits.


Dear Mr.Carroll,

I was awarded Social Security disability before I turned 62. I and am now age 62 and am entitled to Social Security retirement benefits simultaneously with disability benefits. I’m thinking that the Social Security retirement benefits may yield me an overall larger family benefit (I have children at home).

Specifically, I am interested in how my Social Security full retirement age benefit may be calculated compared to how my disability benefit was calculated. 

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Mailbag: The Social Security Family Maximum

answers to social security questions

Question on the application of the Social Security Family Maximum


Here’s my situation:
At 66 I filed and suspended my social security benefits.
I have a 15 year old daughter at home.

Currently, my wife is receiving a Social Security benefit for a “child in care” and my daughter is receiving a benefit as well. My understanding is that my daughter will continue to receive her benefit until she is 18 and my wife will receive her “child in care” benefit until my daughter is 16.

My question is, if I decide to take my benefits before I turn 70, do the “spousal child care” and “child under age 18” disappear?

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Mailbag: Non Typical Pension and The Windfall Elimination Provision

answers to social security questions

Question from a reader on what actually qualifies as a pension for purposes of applying the Windfall Elimination Provision.


Hi Devin,

I just listened to your interview on Radical Personal Finance. I was hoping for a more applied discussion, but Joshua couldn’t get off the politics! Ha. Oh, well. You’ll have to do another sometime.

I had a couple topics in mind where I have not found an answer to, and low and behold, you have a couple blog posts on it. Feel free to add these as addendums to the posts if that adds value/clarity to them.

You’re post entitled “What Illinois Teachers Need To Know About Social Security” hit home with me, as I am in the same situation as teachers in Illinois. I work for our University system here in Alaska, and we do not participate in SS taxes, aside from Medicare. Your explanation of WEP and GPO are the best I’ve seen, although the definition of what is and is not considered a “Pension” is one thing I have not found an answer to. My employer currently pays into 2 separate 401(a) accounts, one of which is actually called a “Pension“, but we manage and bear all investment risks in both accounts, so it’s not a guaranteed monthly income like a traditional pension. Am I correct in saying that the SS administration doesn’t care about the type of account, and that I’ll likely be subject to WEP when the time comes (assuming I meet the other conditions for WEP to become applicable to me)?

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Mailbag: Update on the Repeal of the Windfall Elimination Provision

answers to social security questions

Kathleen asked me about the current status on the repeal of the Windfall Elimination Provision.


Where do things stand legislatively now re Windfall Profit Elimination?

As someone who worked as a teacher for only 10 years–the rest of my employment having been primarily with non-profits–I’m suffering from the cuts to what would have been my  social security. To add insult to injury, California (at least) was not required to alert potential new teachers about the WEP effect until 2 months after I was employed, so I wasn’t informed about it until it was  close to my retirement.

I hope you can send me an update.

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Mailbag: A pastor asks, “Should I Opt Out of Social Security If I’m Already Entitled to Benefits?”

answers to social security questions

Question from a pastor on opting out of Social Security.


I am a full time pastor in NC & I read this article you wrote which prompted a question (

I worked in secular employment for about 20 years before becoming a pastor. I have always had some religious and ethical issues with the SS system but more so since I receive my entire salary from peoples tithes and offerings. So I have a question about should I opt out of Social Security…

Since I worked in non-church based jobs for 20 years and paid SS tax all those years would I still get a benefit from that portion of working life if I opt out of the system with regard to my church income?

Just wondering.

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