Will My Social Security Benefits Be Reduced if My Spouse Works?

When planning for retirement, many individuals consider how various income sources might impact their Social Security benefits. A common concern arises regarding a spouse’s earnings and whether they could lead to a reduction in one’s own Social Security payments. Understanding the rules governing Social Security benefits, particularly those related to earned income, is essential for effective financial planning. This article clarifies the relationship between a working spouse’s income and your Social Security benefits, addressing common misconceptions.

Understanding Social Security Benefits and Earnings Limits

Social Security provides various types of benefits, with two primary categories: retirement benefits and spousal benefits. Retirement benefits are based on an individual’s own work record, calculated from their highest 35 years of indexed earnings. Spousal benefits, conversely, are derived from a spouse’s work record, allowing an eligible individual to claim a benefit typically up to 50% of their spouse’s full retirement benefit. For spousal benefits to begin, the primary earner must generally already be receiving their own Social Security benefits.

The Social Security Administration (SSA) defines “earned income” as wages received from employment or net earnings from self-employment. This includes salaries, bonuses, commissions, and tips. Income sources such as pensions, annuities, investment earnings like interest and dividends, and capital gains are not considered earned income for Social Security purposes. Only earned income is subject to the Social Security earnings limit, also known as the earnings test.

The earnings limit applies to individuals who are receiving Social Security benefits and have not yet reached their Full Retirement Age (FRA). If earned income exceeds specific thresholds, a portion of Social Security benefits may be temporarily withheld. The specific reduction formulas and earnings thresholds change annually.

How Your Own Earnings Can Affect Your Social Security Benefits

If you are receiving Social Security benefits, whether retirement or spousal, and are under your Full Retirement Age (FRA), your own earned income can lead to a reduction in your benefits. The Social Security Administration (SSA) sets annual earnings limits that determine how much you can earn before your benefits are affected. Exceeding these limits results in a temporary withholding of benefits.

For individuals who are under their FRA for the entire year, the SSA deducts $1 from benefits for every $2 earned above the annual limit. In 2025, this limit is $23,400. For example, if you earn $25,400 in 2025, which is $2,000 over the limit, your Social Security benefits would be reduced by $1,000.

A different rule applies in the year you reach your FRA. For that year, the SSA deducts $1 from benefits for every $3 earned above a higher earnings limit, but only for earnings accumulated before the month you attain your FRA. In 2025, this higher limit is $62,160.

How Your Spouse’s Earnings Affect Your Social Security Benefits

In most circumstances, your spouse’s earned income does not directly reduce your Social Security benefits, regardless of whether you are receiving retirement benefits based on your own work record or spousal benefits based on their record. The Social Security earnings test primarily applies to the individual who is receiving benefits and earning income, not to their spouse’s earnings. This means your spouse’s income generally does not directly trigger a reduction in your payments.

Despite this general rule, some indirect effects or nuances can occur. One such scenario involves the family maximum benefit. If the total amount of benefits paid to a family unit, including the primary earner, spouse, and any eligible children, exceeds a certain limit, individual benefits might be proportionally reduced.

If you are receiving spousal benefits, and your spouse’s own Social Security benefit is reduced due to their earnings, your spousal benefit is typically not directly impacted. Your spousal benefit is generally calculated based on your spouse’s full Primary Insurance Amount (PIA), which is the amount they would receive at their Full Retirement Age, not on any potentially reduced benefit they might be currently receiving due to their earnings. This distinction ensures that your spousal benefit remains largely independent of their current earnings test outcome.

Another indirect consideration relates to the initiation of spousal benefits. Spousal benefits cannot begin until the primary earner files for their own Social Security benefits. If your working spouse, as the primary earner, delays filing for their benefits due to their continued earnings or other reasons, this would consequently delay your ability to claim spousal benefits.

The Role of Full Retirement Age

Full Retirement Age (FRA) is a crucial concept in understanding how earned income affects Social Security benefits. FRA is the age at which an individual can claim their full, unreduced Social Security retirement benefit. This age is not universal; it varies based on an individual’s birth year. For instance, individuals born in 1960 or later have an FRA of 67, while those born between 1943 and 1959 have an FRA that falls between 66 and 66 and 10 months.

Once a beneficiary reaches their Full Retirement Age, the Social Security earnings limit no longer applies to their earned income. This means that after attaining FRA, individuals can earn any amount of money from work without their Social Security benefits being reduced or withheld. This rule applies to both the individual receiving benefits and, if applicable, to their working spouse if the spouse is also receiving benefits.

Any Social Security benefits that may have been withheld due to the earnings test before reaching FRA are not permanently lost. Instead, the Social Security Administration typically credits these withheld benefits back to the beneficiary. This is usually accomplished by recalculating their monthly benefit amount at their FRA, resulting in a slightly higher monthly payment for the remainder of their retirement.