Larry, thanks for taking my question.
I own a search firm where my wife works with me out of the home...I've had this company for 27 years now.
Many years I maxed out SS. I was born 8-7-58 and my wife Cindy born 1-14-60. My strategy for years had been to pay myself and pay Cindy very little thinking if I could really crank up my SS earnings...she would get half of that if we both waiting until full retirement age. Now I'm wondering (since I have so many SS credits) if our business should start paying her most of the earnings each year in salary...will that make a difference between now and her max SS age to get her "above" 50% of my SS rate?
I'm happy to pay a consulting fee or buy your software...I just need help knowing how to navigate this properly please as I intend on working exactly 4 more years (until I'm 66 & 8 months) - my full retirement age.
Thanks!
Karl

Hi Karl. I should start out by saying that per IRS and Social Security regulations, the amount of wages paid to a husband and wife from a family corporation is supposed to be commensurate with the services they perform. In other words, you aren't supposed to arbitrarily arrive at the amount of wages paid with an eye toward gaming the system. Nor do we approve of using our software for such purposes.

Furthermore, since Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings, a relatively few years of higher than normal earnings isn't likely to have a huge impact on their benefit rate.

I don't have enough information about your and your wife's earnings histories to know exactly what your best plan would be, but what I can tell you is that if your wife increases her earnings at this point it would likely only benefit her if she could increase her primary insurance amount (PIA) to more than half of your PIA. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). When your wife applies for benefits, she could only be paid the higher her own benefit rate or her spousal rate. Unreduced spousal benefits are calculated based on 50% of the worker's PIA, so if 50% of your PIA is significantly higher than your wife's PIA then there would likely be little or no incentive for her to try to increase her PIA.

That said, our software (https://maximizemysocialsecurity.com/purchase) would allow you to calculate estimates of your and your wife's benefit rates including future years of projected earnings. The software would also allow you and your wife to fully analyze the filing options available to you so that you can determine your best strategy for maximizing your benefits.

Best, Jerry