Ask Liz Weston

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earnings test

Q&A: Do retirement accounts affect survivor benefits?

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Dear Liz: I was 36 with two young children, ages 6 and 2, when my husband died. We are collecting Social Security survivor benefits. I work only part time since my kids are so young. He left two IRAs: one that named me as a beneficiary and one that didn’t name anyone. I understand I can treat the first one as if it were my own, and put off taking withdrawals. The second one must be drained within five years. Will the withdrawals from the second account affect my gross income and ability to collect our monthly Social Security benefit?

Answer: The withdrawals will be considered taxable income, but the money shouldn’t affect your survivor benefits.

Social Security benefits received before your full retirement age are subject to the earnings test, which withholds $1 of benefits for every $2 you earn over a certain amount, which in 2025 is $23,400. The earnings test includes wages and self-employment income, but doesn’t include withdrawals from retirement accounts.

Q&A: Spouse gets the larger of two Social Security benefits, not both

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Dear Liz: Your recent column on the divorced couple where the ex-wife can apply for Social Security benefits has me wondering about my own benefits. I’m 60 and my husband is 79. Can I get his Social Security benefits, and if so, when should I apply? I am working and have worked all my adult life. He has an ex and was married to her for 11 years, so she is getting his and he is getting his. Do I qualify for his and also my own?

Answer: To repeat, Social Security is typically “either/or,” not “both.” When you apply for Social Security, your own retirement benefit will be compared with a spousal benefit based on your husband’s earnings record. You’ll get the larger of the two benefits. The spousal benefit can be up to 50% of your husband’s benefit at his full retirement age, not the amount he’s currently getting.

You can apply as early as age 62, but that means accepting a permanently reduced benefit. Also, early benefits will be subject to the earnings test, which withholds $1 for every $2 earned over a certain limit, which in 2025 is $23,400.

You won’t face the earnings test if you apply after reaching your full retirement age, which is 67. If you delay filing, your own benefit will continue to grow. It maxes out at age 70.

Figuring out the best time to apply can be complicated. AARP has a free calculator that may help, or you can use the more sophisticated paid versions at Maximize My Social Security.

Q&A: A husband dies young, a widow wonders: What are my survivor benefits?

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Dear Liz: My question relates to survivor benefits. How much does the surviving spouse receive in Social Security benefits if the higher-earning spouse dies at 59, before he ever became eligible? He worked for 40-plus years and met all the requirements except not reaching the minimum age. I plan to wait until next year when I’m 60 years old to collect. Will my survivor benefits be based on what he would’ve gotten if he’d reached full retirement age of 67?

Answer: The short answer is yes, but your survivor benefit will be significantly reduced if you start at age 60 and will also be subject to the earnings test, which reduces your check by $1 for every $2 you earn over a certain limit, which in 2024 is $22,320. The earnings test disappears once you reach your own full retirement age.

You’re also allowed to switch from a survivor benefit to your own, or vice versa. Most Social Security benefits don’t allow such flexibility. You could collect survivor benefits while allowing your own to grow, for example, if your own benefit would ultimately be larger.

A paid service such as Social Security Solutions or Maximize My Social Security can help you determine the best claiming strategy.

Q&A: A widow’s Social Security earnings problem

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Dear Liz: My dear friend lost her husband a few years ago. The husband did something wrong with working and collecting Social Security, so they are now withholding her $2,000 monthly Social Security check, which is devastating to her. Can she be punished for what he did unbeknownst to her? She is stuck and doesn’t know what to do.

Answer: People who start Social Security before full retirement age face the earnings test, which reduces benefits by $1 for every $2 earned over a certain amount (in 2022, the amount is $19,560).

It sounds as though the husband didn’t properly notify Social Security about his earnings and the overpayment wasn’t discovered until after his death. Whenever Social Security is unable to recover an overpayment from someone, the agency can collect from anyone else receiving benefits on that person’s earnings record, said William Meyer, founder of Social Security Solutions, a benefits claiming site.

The letter notifying her about the overpayment would have included a section about her appeal rights. If the earnings information was incorrect, for example, she would have 60 days to appeal and supply the correct amount of his earnings.

She also can call the agency’s toll-free number, (800) 772-1213, and request that less be taken from each check. As long as the total owed is paid off within 36 months, the agency will comply, Meyer says. If she can’t afford to have the overpayment repaid within 36 months, she can request longer but she’ll have to provide proof of her income, resources and expenses, he said.

If she’s in dire straits and can’t afford to pay any of the money back — in other words, if she can’t meet her “ordinary and necessary living expenses” — she should submit an SSA-632, “Request for Waiver of Overpayment Recovery” form, Meyer said.

How the “earnings test” works

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Dear Liz: Hi. I learned the hard way about taking early Social Security benefits. I kept working and wound up losing $1 of Social Security benefits for every $2 I earned over a certain low threshold. Do I get this money back at some point or is it a penalty?

 Answer: It’s considered a penalty, but you also get the money back. This so-called “earnings test” is one of several ways the Social Security system tries to discourage people from taking benefits early. The threshold for exempt earnings in 2012 is $14,640. After that point, your Social Security checks will be reduced $1 for every $2 you earn until you reach full retirement age. Once you reach that age, your checks will be increased to reflect the withheld amounts.