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Q: I am 64 and recently widowed. I plan on working until age 70 before I apply for a Social Security benefit. I currently earn $150,000 per year. Are there any disadvantages in applying for a survivor benefit now? I understand that applying for a survivor benefit now will not prevent me from applying for my work benefit at age 70. Is that correct?

I intend to apply for Medicare when I reach 65. I also intend to periodically make withdrawals from my IRA. How will these factors affect my tax situation?

A: It is correct that you can initiate a survivor benefit now and at 70 apply for a larger benefit based on your work record.

Although you can file for a survivor benefit now, there is a disadvantage. Because you have not reached your full retirement age (FRA), your survivor benefit will be reduced because of the level of your current income.

Under current regulations, in 2025, any income that you report above $23,400 will result in a reduction of any Social Security benefit of $1 for every $2 of income above $23,400. If you report $150,000 in income, that would exceed the $23,400 limit by $126,600. So, $63,300 would be withheld from Social Security. You would receive no survivor benefit.

After you reach FRA, there will be no penalty associated with income above $23,400. So you should consider waiting until you reach your FRA before you apply for a survivor benefit.

Regarding IRA withdrawals, although there are no penalties associated with those withdrawals from traditional IRA accounts, that income will result in higher Social Security taxes. For an individual tax return, 85% of Social Security income over $25,000 is taxable.

When you reach 65 and apply for Medicare, you have to be aware of the potential increase in premiums for Part B (medical expenses) and Part D (prescription drug expenses). There is a two year look-back calculation associated with income-related monthly adjustment amount.

For example, if you plan on enrolling in Medicare in 2026, the IRS will consider your modified adjusted gross income (MAGI) from 2024. If your MAGI exceeds specified limits in 2026, you would be subject to surcharges associated with your premiums for Part B and Part D.

So, when it comes to tax planning for future years, it is important for you to know the implications associated with the income you expect to report after you enroll in Medicare. You should understand the options you have associated with reporting income that will result in higher premiums for Part B and Part D of Medicare.

If you have choices regarding withdrawal of taxable income from sources such as IRAs, you should make your choices based on whether you would be subject to surcharges. For example, if you know that your income in a specific year is lower than average, that might be a good year to make IRA or 401(k) withdrawals.

You should be aware of the restrictions associated with the new senior deduction of up to $6,000/individual. If your income (individual return) exceeds $175,000 ($250,000 for joint returns), you lose some or all of this deduction. So, if your expected income approaches these limits, you should limit your IRA or 401(k) withdrawals if you can do so.

A great deal of this response was provided by Heather Schreiber, an expert in Social Security who contributed recently to Ed Slott’s monthly newsletter. If you would like professional consulting regarding Social Security issues, she can be contacted at heather@hlsretirementconsulting.com.

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.