Q. I plan to retire at 62 and claim the (higher) 50 percent on my husband’s Social Security. My husband is 72 and plans to continue working. We file jointly. Since he is older than 72, his earnings are not affected, but because I plan to retire at 62, what is considered the “annual limit” before we are penalized by having $1 deducted for each $2 earned? Should I continue working with a gross income of approximately $50,000; and max out my TSP contributions, including catch-up, plus max out my health savings account (my net salary would be approximately $12,000 after Medicare taxes, etc.)? Would the gross $50,000 or the net $12,000 be included in our joint “earned income”?
A. You will find a summary of the rules governing the effect of earning income on your Social Security benefit here: https://www.ssa.gov/pubs/EN-05-10069.pdf. You should consult a tax accountant for help with applying the rules to your specific situation.