Does Early Retirement Mean Benefits Reduced Forever;
Wife Gets No Credit from Family Business
Many seniors may be surprised by these questions and
the answers; things you need to know about Social Security
Jan. 15, 2014 - Two good questions are answered
today in the Social Security Q&A by Oscar Garcia, Public Affairs
Specialist with the Social Security Administration. A senior wants to
know if taking early retirement means the benefit will continue to be
reduced. And, a wife wants to know why she is not getting credits for
earnings she and her husband earn in joint business.
If I take early retirement and still work will
my benefits continue to be reduced because I retired at age 62?
Social Security will review the age 62 reduction
factor when a person reaches full retirement age. At that time, we will
determine if there is any month a benefit was not paid because of
earnings that exceeded the annual earnings test amount. We remove those
month(s) from the reduction factor calculation. Then, we pay the higher
benefit for the month the person attained full retirement age and for
all subsequent months.
Here is how this works. Suppose you
apply for benefits at age 62, but continue to work. Prior to reaching
full retirement age you do not receive benefits for 12 months due to
your earnings being more than the annual work limit. When you attain
full retirement age, Social Security will credit the reduction factor
for those 12 months back to you.
This means your benefit amount will
be re-calculated and adjusted upward. This way your benefit amount is
calculated only on the actual number of months that you received early
My husband and I have owned and operated a
business together for many years, but my Social Security Statement does
not show any earnings for me. We file joint income tax returns every
year. What happened to my share of our earnings?
If you and your husband own and operate a business
together and you share in the profits and losses, you may be entitled to
receive Social Security credits as a partner. This may be true even if
you and your husband have no formal partnership agreement.
To receive credit for your share of the business
income, you must file a separate self-employment return (Schedule SE)
even though you and your husband file a joint income tax return. If you
do not file a separate Schedule SE, all the earnings from the business
will be reported under your husband's Social Security number.
In that case, your Social Security record will not
show your earnings and you may not get credit for them. If you have not
filed Schedule SE for yourself for past years, you may be able to file
corrected tax returns for past years.
You should contact the Internal Revenue Service for
more information on this, or any other tax-related questions. This is a
good reason why people should get into the habit of checking their
Social Security earnings record at least every 3 years. If you are not
receiving credit for all of your earnings, you want to learn about it as
soon as possible so that you can correct it while you still have access
to important records. The best way to check your earnings history is by
creating a my Social Security account at
Oscar Garcia is a Public Affairs Specialist
with the Social Security Administration. You can direct your questions
to him at: SSA, 411 Richland Hills Drive, San Antonio, Texas, 78245. You
can also email him at Oscar.firstname.lastname@example.org.
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