My husband and I are getting close to retirement. He plans on drawing next year at age 70. I just
turned 66. We own a business, and he has been taking all of the income under his name on our joint
tax return for the past several years and getting all of the social security credits. We planned on filing
for social security next year, when he will be 70 and I will be 67. Should we start diverting all of the
income from our business into my name now; so I can accumulate more income and more benefits by
the time I am 70? I was thinking of taking my spousal benefit at 67, when my husband turns 70, and
having my personal benefits grow to the maximum? How do they determine what your spousal
benefits are when I turn 67 if I do not take my personal SS benefits at that time? We may keep our
business going until I turn 70, unless we get a good offer on selling it before that time. Thank you.

Hi,

First of all, profits from a sole-proprietorship are supposed to be reported under the Social Security number (SSN) of the main owner-operator of the business, so the IRS or Social Security Administration could take exception to your proposed change.

That issue aside, though, switching the business earnings to your record at this point might be counter-productive. Unless your retirement benefit rate would exceed 50% of your husband's full retirement age rate (PIA), you would likely gain nothing by reporting additional earnings to your SSN. That's because you could only be paid the higher of your own retirement benefit rate, or 50% of your husband's PIA as a spouse. And, by diverting earnings away from your husband's record you could potentially lower his benefit rate and your spousal benefit rate, as well as your widow's rate should your husband die first.

Bottom line, the answer to your question largely depends on your and your husband's relative benefit rates and earnings histories. You may want to strongly consider using our maximization software, which would permit you to calculate the likely effects of your proposed redirection of earnings. The software would also enable you and your husband to compare your filing options and determine your best overall strategy for claiming benefits.

Best, Jerry