published Thursday, July 12th, 2012

Social Security: Benefit amount based on spouse's earnings

Martin Coffey

Q. I am retired and get a Social Security check each month of $1,200, and my wife will soon be 62. If she retires and my half is more than what she would get, $600, how much can she earn in income a year without affecting her $600 a month benefit?

A. A wife or husband can be entitled to as much as one-half of their spouse's benefit amount when he or she reaches full retirement age. However, the spouse must file for benefits before he or she can begin receiving them on the spouse's record. If a wife or husband begins to get Social Security retirement benefits before he or she reaches full retirement age, the amount of their benefit will be reduced permanently. The amount the benefit is reduced depends on when he or she will reach full retirement age.

The amount of the spouse benefit will increase if he or she waits until they are older up to the maximum of 50 percent at full retirement age. If a person's full retirement age is different from those shown here, the amount of benefit will fall between 32.5 percent and 37 percent at age 62. However, if a spouse is taking care of a child who is under age 16 or who gets Social Security disability benefits, a spouse will get full benefits, regardless of age.

Q. How does work affect your benefits?

A. If you were born Jan. 2, 1943, through Jan. 1, 1955, then your full retirement age for retirement insurance benefits is 66. If you work and are full retirement age or older, you may keep all of your benefits, no matter how much you earn. If you are younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you are younger than full retirement age during all of 2012, we must deduct $1 from your benefits for each $2 you earned above $14,640. If you reach full retirement age during 2012, we must deduct $1 from your benefits for each $3 you earn above $38,880 until the month you reach full retirement age.

Sometimes people who retire in mid-year already have earned more than the yearly earnings limit. That is why there is a special rule that applies to earnings for one year, usually the first year of retirement. Under this rule, you can get a full Social Security check for any whole month you are retired, regardless of your yearly earnings. In 2012, a person under full retirement age for the entire year is considered retired if monthly earnings are $1,220 or less. Also, if you are self-employed, we consider how much work you do in your business to determine whether you are retired.

One way is by looking at the amount of time that you spend working. In general, if you work more than 45 hours a month in self-employment, you are not retired; if you work less than 15 hours a month, you are retired. If you work between 15 and 45 hours a month, you will not be considered retired if it is in a job that requires a lot of skill or you are managing a sizable business.

Submit questions to local Social Security Director Martin Coffey by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at dflessner@timesfreepress.com.

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