TRANSCRIPT
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#71 - Can I Stop My Social Security Benefits If I Go Back to Work? A Listener Case Study
Introduction
Eric Blake: On today's show, we're going to talk about what happens when you retire, start Social Security, and then life turns your plans upside down. Welcome to another episode of the Simply Retirement Podcast, where we want to empower and educate women to live your retirement on your terms. I'm your host, Eric Blake, practicing retirement planner with over 25 years of experience, founder of Blake Wealth Management. And I would not be the man I am today without the women in my life.
This episode is based on a real-life listener question that includes retirement, divorce, Social Security, and unfortunately, potentially having to go back to work. With the increasing rate of gray divorce, these are all challenges many women may face in their later years. It’s worth unpacking very carefully.
Eric Blake: And joining me today again is Wendy McConnell. Wendy, how are you?
Wendy McConnell: I'm good. How are you?
Eric Blake: I'm very well. It’s hot and muggy here in Texas. Maybe it feels worse where I’m recording, almost like a sauna. But we’ll get through it. Ready to dive in?
Wendy McConnell: Great. Can’t wait.
Listener Case Study
Eric Blake: So here’s the listener question that inspired our conversation today:
My husband retired in January and is receiving full Social Security. We agreed I would go ahead and apply for Social Security too, but I would only receive half of his since I'm only 62. Now he's left after 36 years of marriage. My question is: I will have to go back to work. Do I need to report to Social Security to stop my $1,523 a month, and how do I go about doing that?
Wendy McConnell: Oh, I’m so sorry to hear that.
Eric Blake: Yes, it’s a tough situation. She asked me not to share her name, and I want to respect her privacy. But this scenario has so many moving parts that it’s worth walking through carefully.
What We’ll Cover in This Episode
Eric Blake: Here’s the roadmap for today’s discussion:
How to determine what kind of Social Security benefit she’s actually receiving
The process for withdrawing Social Security benefits (Form SSA-521)
The impact of the earnings test if she goes back to work
Why returning to work could increase her future benefit
What to know about ex-spouse and survivor benefits
Eric Blake: We also talked about the strategy of withdrawing your application back on Episode 47, where we shared three little-known strategies, this being one of them. So I definitely encourage you to go back and take a listen.
Determining the Benefit She’s Receiving
Eric Blake: The first thing I want to do is cover how we determine what kind of Social Security benefit she’s actually receiving. She says she’s getting half of his, but she also says the amount is $1,523. I don’t think that’s a spousal benefit. Let me explain why.
She’s 62, and if she applied at 62, the maximum spousal benefit would be about 32.5% of her husband’s full retirement age benefit. If I do the math—$1,523 being 32.5% of his—his benefit would need to be almost $4,700 a month. That’s not possible. The maximum full retirement age benefit in 2025 is about $3,800.
Wendy McConnell: Okay.
Eric Blake: So what I think happened is that $1,523 is actually her own retirement benefit. It just happens to be about half of his, which makes it look like a spousal benefit, but it’s not. That distinction is important for the decisions she’ll have going forward.
So, my most likely explanation: she’s receiving her own reduced benefit because she applied early at 62. That means it’s permanently reduced from what it would have been if she had waited until her full retirement age.
Withdrawing Social Security Benefits
Eric Blake: Now let’s talk about what happens if she wants to stop benefits. She and her husband applied in January, so we’ll assume she started then. The quick answer is yes—she has 12 months from the date of application to fully withdraw her Social Security application.
Here’s the key: you must pay back every dollar you’ve received.
Wendy McConnell: That’s always the tough part, right?
Eric Blake: Exactly. That’s the challenge. But the option is there. The form you’d need is SSA-521, Request for Withdrawal of Application. That’s the official document you file to say, “I want to withdraw my Social Security benefits and start fresh.”
If it’s your own benefit, you only put your information on the form. If it’s a spousal benefit, you must include both your spouse’s information and yours, since the benefit is tied to his record. It’s a small detail, but important.
Eric Blake: Another key point: if you’re already on Medicare when you withdraw your Social Security application, you must also pay back any Medicare Part B premiums that were withheld. And going forward, you’d receive a quarterly bill for premiums instead of having them deducted from your Social Security check.
Wendy McConnell: That’s a painful surprise for people.
Eric Blake: It is. And it can add up quickly. Even though those premiums didn’t go directly into your pocket, they count as part of your benefit. So you still owe them back if you withdraw.
The Earnings Test and Returning to Work
Eric Blake: Let’s say she can’t afford to pay everything back in order to withdraw her application. What happens then? That’s where the earnings test comes into play.
If you retire before full retirement age and continue to work while receiving Social Security, you may have to pay back part of your benefits if your earnings exceed a certain limit. In 2025, if you’re under full retirement age, you can earn up to $23,400 without any penalty.
Wendy McConnell: Okay.
Eric Blake: If you earn more than that, for every $2 you earn above the limit, $1 of your Social Security benefit will be withheld. Let’s take an example. Suppose you earn $40,000 in a year. That’s $16,600 above the limit, which means about $8,300 of your benefit would be withheld—roughly six months’ worth.
Wendy McConnell: That’s a lot to lose.
Eric Blake: It is. But here’s an important point: that money isn’t gone forever. Once you reach full retirement age, Social Security recalculates your benefit to account for those months of withholding. The catch is, they don’t give it back in a lump sum—it’s spread out over your lifetime as a higher monthly benefit.
Wendy McConnell: They make the rules, so of course they don’t have to follow them.
Eric Blake: Exactly. Another factor is timing. Once you’re within one year of full retirement age, the earnings limit increases significantly. In 2025, it goes up to about $62,160. The formula also changes—you lose $1 in benefits for every $3 you earn above that higher limit. That can make a big difference.
Eric Blake: There’s also a special rule for the first year you claim Social Security. Instead of an annual test, it’s a monthly earnings test. So, for example, if you retire July 1 and start Social Security, only the last six months of the year are tested. You divide the $23,400 annual limit by 12, and as long as your monthly income after retirement is below that amount, you’re okay.
Wendy McConnell: That makes a difference for someone who works half the year and then starts benefits.
Eric Blake: Exactly. Still, it can create cash flow disruptions if you’re working, collecting Social Security, and then find out you owe money back because you exceeded the limit.
How Returning to Work Could Increase Future Benefits
Eric Blake: One of the key things to keep in mind is that going back to work could actually help her in the long run. Social Security benefits are based on your highest 35 years of earnings, adjusted for inflation.
As we know, women are more likely than men to have gaps in their work history—maybe taking time off to raise children or to care for aging parents. Those years show up as zeros or lower-income years in the Social Security formula.
So if she returns to work now, she could potentially replace some of those zeros or low years with higher earnings. That could increase her Social Security benefit permanently, even if she’s already receiving benefits.
Wendy McConnell: That’s a silver lining.
Eric Blake: It is. So while it may feel discouraging to need to return to work, it could actually improve her future income. And because I believe she’s receiving her own retirement benefit rather than a spousal benefit, that makes this even more relevant to her situation.
Eric Blake: Whether she withdraws her application or keeps it and deals with the earnings test, higher earnings could still positively impact her benefit down the road.
Wendy McConnell: Good to know there’s at least a potential upside.
Eric Blake: Exactly. It’s about putting as much positive spin on a difficult situation as possible, while also being fully aware of the variables in play.
Ex-Spouse and Survivor Benefits
Eric Blake: Now let’s talk about the future potential ex-spousal and survivor benefits she should be aware of. We often say that after divorce or the loss of a spouse, you have to put the financial puzzle pieces back together. Social Security is an important part of that picture.
She mentioned being married for 36 years, so she meets the requirement for divorced spouse benefits, which only requires 10 years of marriage. But again, because I believe she’s already receiving her own retirement benefit, that may remain the primary factor.
If she were receiving a spousal benefit, remarriage would disqualify her from that benefit. But survivor benefits are different. If her ex-husband passes away, she could qualify for a survivor benefit equal to 100% of what he was receiving at the time of his death.
Wendy McConnell: Wait, I thought survivor benefits were only half.
Eric Blake: That’s a common misconception. Spousal and ex-spousal benefits max out at 50% of the worker’s benefit. Survivor benefits are different—they’re 100% of the worker’s benefit. That’s why it’s so important to distinguish between them. Survivor benefits used to be called “widow’s benefits,” which was clearer, but the terminology was changed to be gender-neutral.
Eric Blake: Because she’s 62, she’s already old enough to qualify for survivor benefits if something happens. And since she was married for more than 10 years, divorce wouldn’t disqualify her. She could also remarry after age 60 and still retain eligibility for survivor benefits from her first marriage.
Wendy McConnell: That’s an important distinction.
Eric Blake: It really is. People often confuse spousal benefits, ex-spousal benefits, and survivor benefits. Each has different rules, and knowing which applies can significantly affect retirement planning.
Eric Blake: In her case, because her husband’s benefit is roughly twice her own, the survivor benefit would likely be the higher benefit for her in the future.
Key Takeaways and Wrap-Up
Eric Blake: Let’s walk through the key takeaways from her situation.
She’s receiving $1,523 a month, which is most likely her own reduced benefit—not a spousal benefit.
She can withdraw her application within 12 months using Form SSA-521, but she would need to repay every dollar of benefits received, including any Medicare premiums that were withheld.
If she does not withdraw, the earnings test could reduce her benefit depending on how much she earns before full retirement age.
Returning to work could actually increase her Social Security benefit by replacing lower-earning years in her record.
If her ex-husband passes away, she would likely qualify for the higher survivor benefit—100% of his benefit at the time of death.
Wendy McConnell: I’m glad you explained the difference between survivor benefits and ex-spousal benefits. That’s something I think many people confuse.
Eric Blake: Absolutely. Survivor benefits are 100%, while spousal benefits are capped at 50%. Understanding that difference is critical.
Eric Blake: Hopefully, listeners can pull out the parts of this case study that apply to their own circumstances. And if you’re facing a Social Security decision—especially during a major life change—you don’t have to go it alone.
If you’re looking for a personalized retirement plan that helps you make smart decisions around your income, investments, and taxes, you can visit getmysimplyretirementroadmap.com to learn more about our Simply Retirement Roadmap process.
As always, for links and resources mentioned in today’s episode, visit thesimplyretirementpodcast.com. Please don’t forget to like, follow, and share the show. And remember, retirement is not the end of the road—it’s the start of a new journey.
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