Does My Spouse’s Income Affect My Social Security Benefits?
Learn how your spouse's income might affect your Social Security benefits. Understand its impact on your benefit amount and tax obligations.
Social Security benefits are important for retirement planning. A common question is how a spouse’s income affects one’s own Social Security benefits. Understanding how Social Security calculates benefits is important for financial preparation. This article clarifies the extent to which a spouse’s income can affect your Social Security.
Your Own Earned Social Security Benefits
An individual’s Social Security retirement benefit is determined by their personal earnings history. The Social Security Administration (SSA) calculates this benefit based on your Average Indexed Monthly Earnings (AIME), considering your highest 35 years of covered earnings. Earnings from earlier years are indexed for inflation to reflect changes in average wages over time.
The sum of these 35 highest indexed earning years is divided by 420 to arrive at your AIME. This AIME is applied to a formula with “bend points” to determine your Primary Insurance Amount (PIA). The PIA represents the monthly benefit you would receive if you claim benefits at your full retirement age (FRA).
A spouse’s current income does not directly reduce your own earned Social Security retirement benefit. Your PIA is an individual calculation based on your personal work record and contributions. If you have fewer than 35 years of earnings, zero-earning years will be included, which can lower your AIME and PIA. This reduction stems from your own work history, not your spouse’s income.
Benefits Claimed on a Spouse’s Record
While your own Social Security benefit is based on your earnings, you might also be eligible for benefits based on your spouse’s work record, known as spousal or survivor benefits. Spousal benefits can be claimed if you are at least 62 and your spouse has already filed for their own retirement benefits. You can receive up to 50% of your spouse’s Primary Insurance Amount (PIA) if you claim at your full retirement age.
If you claim spousal benefits before your full retirement age, the amount you receive will be permanently reduced. Your own earnings can impact the amount of spousal benefits you receive through the Social Security earnings test. If you are below your full retirement age and work while receiving spousal benefits, a portion of your benefits may be withheld if your earnings exceed annual limits. For 2024, if you are under your full retirement age, you can earn up to $22,320 before benefits are reduced by $1 for every $2 earned above the limit.
Survivor benefits, available to widows or widowers, are calculated differently. As a surviving spouse, you can receive up to 100% of your deceased spouse’s PIA, depending on your age when you claim. Similar to spousal benefits, if you work while receiving survivor benefits and are below your full retirement age, your own earnings can subject your benefits to the earnings test. For 2025, if you are under your full retirement age, the SSA reduces survivor benefits by $1 for every $2 you earn above $23,400.
Your spouse’s current income does not directly reduce the spousal or survivor benefit you receive once established. The amount is based on your spouse’s (or deceased spouse’s) earnings history and their resulting PIA. While your own earnings can lead to benefit reductions through the earnings test, your spouse’s ongoing income does not cause a direct reduction to your derivative benefit. The spouse’s earnings history establishes the benefit pool.
Taxation of Your Social Security Benefits
Taxation of Social Security benefits is one area where a spouse’s income can directly influence your net amount. Federal income tax on benefits is determined by your “provisional income” (also “combined income”). This figure adds your Adjusted Gross Income (AGI), any tax-exempt interest, and 50% of your Social Security benefits.
The Internal Revenue Service (IRS) establishes provisional income thresholds. If your provisional income falls within certain ranges, a portion of your Social Security benefits becomes taxable. For single filers, if provisional income is between $25,000 and $34,000, up to 50% of benefits may be taxable. If it exceeds $34,000, up to 85% of benefits may be taxable.
For married couples filing jointly, thresholds are higher. If your combined provisional income is between $32,000 and $44,000, up to 50% of your Social Security benefits may be subject to federal income tax. If your provisional income exceeds $44,000, up to 85% of your benefits may be taxable. Filing jointly means your spouse’s income is included in your combined provisional income calculation.
A higher combined provisional income, influenced by your spouse’s earnings, can push you into a higher tax bracket for Social Security benefits. For example, if your individual provisional income is below the taxation threshold, but your spouse’s income increases the combined provisional income above $44,000, up to 85% of your Social Security benefits could become taxable. This reduces the net amount you receive. Therefore, while a spouse’s income generally does not affect your gross Social Security benefit, it can significantly impact how much is subject to federal income tax, affecting your ultimate take-home amount.