Stay-at-Home Spouse: 2025 Social Security & Tax Pitfalls

The hidden cost of a $0 paycheck

Quick question, what’s the price tag on a year without wages? Feels like zero, right? Not quite. In 2025, when households are juggling childcare costs, high-ish mortgage rates, and a job market that’s still tight in spots, those “zero-earning” years can quietly chip away at two big things: your future Social Security check and your tax bill right now. I’ve watched this play out over two decades on the Street and, yep, it still surprises people. Me included, occasionally.

Here’s the simple version: Social Security calculates your benefit using your highest 35 years of inflation-adjusted earnings. Any year with $0 goes straight into that average. Fewer than 35 working years? The empty boxes are filled with zeros. That’s not theoretical, it’s how the formula works. And it matters a lot more than it sounds when you stack up multiple years at home with kids or a career pause. There’s a partial offset later via the spousal benefit (up to 50% of the higher earner’s Primary Insurance Amount, if that’s bigger than the nonworking spouse’s own benefit), but that’s a different lever than replacing your own earnings record. Two different math problems, basically.

Taxes are where it gets sneakier. A household with one earner can often pay more total tax on the same income than two earners because of how brackets, credits, and payroll taxes interact. Why? A few mechanics that are easy to overlook:

• Payroll taxes bite first. The employee share is 7.65% (that’s 6.2% Social Security up to the annual wage base and 1.45% Medicare on all wages; plus the 0.9% Additional Medicare Tax above $250,000 for married filing jointly). One paycheck or two, the rate’s the rate, but concentration of income can change what you can shelter and which thresholds you trip.
• Childcare tax breaks hinge on earned income from both spouses. The dependent care FSA lets you set aside up to $5,000 per household pre-tax (under IRC §129). If one spouse has no earned income, that pre-tax window usually collapses to $0, which can raise your tax bill in a hurry when daycare is running four figures a month.
• Credits and phaseouts behave differently. The Child and Dependent Care Credit and Saver’s Credit both depend on earned income and adjusted gross income. Two earners can sometimes split pay and 401(k) deferrals to stay under phaseout lines. One earner? Less room to maneuver. Same family income, worse after-tax result. It happens a lot in the $80k-$180k range.

Reality check: Social Security’s 35-year rule and the tax code aren’t moral judgments. They’re formulas. If a year shows $0 wages, your average drops, and if only one spouse earns, certain credits and shelters get tighter.

What are you going to get from this section? Three things, and we’ll keep it practical: (1) how a single $0 year affects your Average Indexed Monthly Earnings and what that means in dollars over retirement; (2) where one-earner families this year tend to overpay (payroll taxes, childcare benefits, and phaseouts); and (3) the levers you still control, filing status choices, withholding and estimated payments, and the timing of income and deductions. Does timing really matter? Short answer: yes. Long answer: yes, especially in Q4 when bonuses, Roth conversions, or RSUs hit the W-2.

I’m not here to be the oracle, my core philosophy is intellectual humility. The code changes, life changes, and the market refuses to read our memos. But the patterns are consistent. Zero-earning years aren’t free, and once you see the ripple effects across Social Security and your 2025 tax picture, you’ll manage them on purpose, not by accident. Okay, on we go.

Social Security 101 for the at-home spouse

Social Security 101 for the at‑home spouse

Here’s the straight version, and I’ll keep the jargon to a minimum. If your spouse is the higher earner, you can claim a spousal benefit worth up to 50% of their Full Retirement Age (FRA) benefit, that 50% is based on the worker’s Primary Insurance Amount (PIA). Two gating rules: you must be at least 62, and the worker must have filed. You don’t need your own 40 credits to qualify for a spousal benefit. If you do have your own benefit, Social Security pays that first, then “tops you up” to the higher spousal amount if applicable. No double-dipping.

Here’s why timing matters: filing before FRA permanently reduces both your own and spousal amounts. For someone with FRA at 67, claiming spousal at 62 cuts the 50% maximum to roughly 32.5% of the worker’s PIA. And delayed retirement credits (those +8% per year after FRA) apply to your own worker benefit, not to the spousal benefit. One exception-ish: survivor benefits do reflect the deceased worker’s delayed credits.

Speaking of that, the often-missed lever is the survivor benefit. If your spouse passes, the survivor benefit can be up to 100% of the deceased worker’s actual benefit (including their delayed credits), subject to the age you claim. Earliest survivor claim is age 60 (or 50 if disabled), but early filing reduces the amount, down to about 71.5% at 60. For lifetime planning, that survivor check is usually the bigger swing factor, especially for couples where the higher earner delays to 70 to “buy” a larger survivor floor. Morbid? Yeah. Important? Also yeah.

Now, the earnings test. If you work while claiming before FRA, Social Security withholds benefits when your earnings exceed the annual limit (SSA updates this every year). For reference, in 2024 the limit was $22,320 if you’re under FRA for the full year, and $59,520 in the year you reach FRA (they temporarily withhold $1 for every $2 or $3 over the limit, depending on which bucket you’re in). The math gets reconciled later, but cash flow can be choppy, worth planning around if you’re picking up part-time work. And yes, check the current year’s thresholds before you file.

Okay, how do you decide?

• If the worker is delaying to 70: the at‑home spouse often waits until FRA to max the 50% spousal. This preserves the survivor benefit if the worker dies first and keeps the spousal from being haircut.
• If cash flow is tight: claiming earlier can make sense, but know the reduction is permanent. And if you’re still working, the earnings test may chew up checks anyway.
• If your own benefit could be meaningful: sometimes you claim your own early, then switch to survivor later if that becomes higher. You can’t switch from spousal to your own with delayed credits magically added; that ship sails based on when you actually file your worker benefit.

Small real-world example: if your spouse’s PIA is $3,000, your max spousal at FRA is $1,500. At 62, it’s closer to $975. If your own worker benefit is $400 at 62, SSA pays the $400 first, then a top-up of ~$575 to reach the ~$975 total. Sounds fussy because it is.

Two last notes I’ve learned (sometimes the hard way): the at‑home spouse’s claiming age and the higher earner’s delay strategy interact with portfolio risk. With rates still elevated this year and short-term yields hovering near where they were earlier this year, some households are using Treasury ladders to bridge to FRA or 70 rather than locking in a permanently reduced spousal. And yes, Social Security rules are a maze. I get it. I still re-check the POMS on weird edge cases and I’ve been at this 20+ years.

Actionable checklist: confirm the worker’s PIA, your FRA, current-year earnings-test limits, and a survivor plan. Then decide whether cash flow now beats lifetime optionality later. No heroics, just math and a couple of birthdays.

The tax angle: when Social Security becomes taxable

The IRS looks at something called provisional income, which is a wonky way of saying: take your AGI, add back any nontaxable interest (yes, muni bond interest counts), and then add half of your Social Security. That total drives how much of your benefit shows up on your 1040. This rule set dates back to the 1980s and it hasn’t been inflation-indexed, which is why it feels like more retirees get snagged every year even if their lifestyle hasn’t changed much.

Here are the fixed thresholds Congress set decades ago: for single filers, benefits start becoming taxable when provisional income tops $25,000, and for married filing jointly, it’s $32,000. Cross the higher breakpoints, $34,000 single or $44,000 MFJ, and up to 85% of your Social Security can be taxable. Not 85% tax rate, 85% of the benefit is included in taxable income. Those dollar amounts are from the original law and still apply in 2025. No inflation bump, which, after the last few years of higher COLAs and decent cash yields, bites.

One more trap that ambushes couples: married filing separately. If you live with your spouse at any point during the year and file MFS, the IRS basically treats up to 85% of your Social Security as taxable right out of the gate. There are edge cases where MFS makes sense, but for Social Security specifically, it’s usually a tax landmine. I’ve watched more than one high-income household trip this wire trying to isolate medical deductions.

Why does the taxability creep up on people now? Because the “other income” bucket swells in retirement. RMDs at age 73 (current law), pensions that don’t shrink, interest from cash that still pays real money this year, and capital gains from a rebalance or a one-off fund distribution, each one lifts provisional income. And yes, even if the stay-at-home spouse has zero wages, the couple’s combined provisional income is what counts. I had a client who thought her $0 paycheck meant $0 tax on his benefit. Nope. The spreadsheet said otherwise.

Quick, imperfect mental math you can do: estimate your AGI (pretax IRA withdrawals, pension, dividends, realized gains), add any muni interest, then tack on half your expected Social Security. If that lands above $32k as a couple, or $25k single, you’re in the taxable zone. When we get to the withdrawal sequencing section, you’ll see why I harp on this…

States are their own story. A handful still tax benefits in some form, some have income-based exemptions, others phase out relief as income rises. Rules have been changing the last few years, and states tweak thresholds often. Check your state’s 2025 guidance before you estimate take-home. A quick call to your CPA now beats a spring surprise. And with money markets and short Treasuries still paying decent yields this year, lots of retirees will show more interest income than they’re used to, good problem, but it pushes those thresholds.

• Remember: Provisional income = AGI + nontaxable interest + 1/2 of Social Security.
• Thresholds (not indexed): $25,000 single, $32,000 MFJ; upper brackets at $34,000/$44,000 where up to 85% becomes taxable.
• MFS warning: Often triggers up to 85% taxable treatment almost immediately if you lived with your spouse.
• Watch the add-ons: RMDs, pensions, interest, and capital gains can push you over, even with one spouse not working.

Practical move: map out 2025 income now. If you’re close to a threshold, consider timing capital gains, using tax-efficient funds, or partial Roth conversions in lower-income years. Small shifts can keep more of your benefit out of the taxable column.

Building retirement in one-earner households: the spousal IRA play

Quick reality: a stay-at-home spouse can still stack retirement dollars. The tax code actually helps here. If you file married filing jointly and the working spouse has enough earned income to cover both contributions, the nonworking spouse can fund a traditional or Roth IRA. It’s one of the best deals around for single-income families, and I say that as someone who’s spent too many Saturday mornings untangling tax forms with coffee and a highlighter.

Couple basics first. You need earned income in the household, wages or self-employment, at least equal to the sum of both IRAs. For 2024, the IRA contribution limit is $7,000 per person, with a $1,000 catch-up at age 50+. Use the current-year limits when you actually contribute in 2025. And you can mix and match between traditional and Roth as long as your combined total per person stays within the annual cap.

Now, deductions and eligibility, this is where folks get tripped. If either spouse is covered by a workplace plan (401(k), 403(b), etc.), the deductibility of a traditional IRA for the noncovered spouse phases out with income. For 2024, if one spouse has workplace coverage, the noncovered spouse’s traditional IRA deduction phases out at modified AGI of $230,000-$240,000 (MFJ). I almost said “MAGI” without explain it, think of it as your AGI after a couple add-backs the IRS cares about. For 2025, thresholds will be slightly higher, check the latest IRS tables when you push the button.

On the Roth side, it’s about eligibility, not deductibility. For 2024, Roth IRA contributions for married filing jointly phase out at $230,000-$240,000 of modified AGI. If you’re contributing in 2025, use the current-year Roth limits and phase-outs when you actually fund, don’t rely on last year’s numbers.

• If you’re over the Roth income limit: consider a backdoor Roth, make a nondeductible traditional IRA contribution, then convert to Roth. Watch the pro-rata rule: if you have other pre-tax IRA money (traditional, SEP, SIMPLE), the IRS treats all IRAs as one big bucket when figuring the taxable part of the conversion. Translation: a clean backdoor works best when you have minimal pre-tax IRA balances. Some folks roll pre-tax IRAs into a 401(k) to clear the deck first.
• ACA subsidies: Roth conversions raise your MAGI, which feeds the Affordable Care Act premium credits. The subsidy structure (extended through 2025) smooths rather than cliffs, but higher MAGI still means smaller subsidies. If one spouse is off the employer plan and on the exchange, model it before converting.
• Medicare IRMAA: conversions can kick you into higher Part B/D premiums two years later. That two-year lookback bites people. A chunky 2025 conversion can mean higher 2027 premiums. Doesn’t mean don’t do it, just price it in.

One more angle people miss in single-income years: taxable interest has been juiced. Short-term Treasuries are still paying decent yields this year, so even your “safe” cash can nudge MAGI higher. That’s good news for savings, but it can tip you across phase-out lines if you’re right on the edge. Annoying, I know.

Actionable checklist

1. Confirm you’re filing MFJ and the working spouse has enough earned income to cover both IRA contributions.
2. Pick the account type: deductible traditional (if eligible), nondeductible traditional (if aiming for backdoor), or Roth (if under the income phase-out).
3. Use 2025 limits and phase-outs at the time you fund this year; don’t default to 2024 numbers.
4. If considering a backdoor Roth, review all existing IRA balances and the pro-rata math. If needed, explore rolling pre-tax IRAs into a 401(k) to isolate basis.
5. Model the MAGI impact on ACA subsidies and estimate Medicare IRMAA two years out. A quick spreadsheet beats surprises.

Bottom line: If you’re a one-earner household, the spousal IRA keeps both partners building retirement capital. It’s flexible, tax-efficient, and, done thoughtfully, kinda the rare free lunch in personal finance.

2025 tax moves that actually help one-earner families

Quick wins first. If you’re a single-income household this year, tighten the basic levers before you chase fancy stuff. It’s not glamorous, but it adds up.

• Recalibrate the working spouse’s W‑4 now. If you’re taking a deductible spousal IRA in 2025, your AGI drops, and if you qualify for the Child Tax Credit, withholding should reflect that too. Otherwise you’re giving the IRS an interest‑free loan all year. Use the IRS withholding estimator and tell payroll to withhold less after you account for (a) the spousal IRA deduction and (b) the CTC. Reminder: the CTC phaseout for married filing jointly still starts at $400,000 of MAGI under current law. Rules around refundability have been tweaked a few times in recent years, confirm 2025 specifics before year‑end so you don’t over-withhold.
• Harvest capital gains in the 0% bracket. One-earner families sometimes land in the right zone where long‑term gains can be realized at 0%. The threshold is tied to the IRS’s 0% capital gains band for married filing jointly. Don’t guess, check 2025 tables and your taxable income after the standard deduction (MFJ standard deduction is around $30,800 in 2025). If you’re under the 0% ceiling, you can sell winners, reset basis, and pay zero federal tax on the gain. I did this for a client earlier this year with a $18k embedded gain in an index fund, locked in tax‑free and reduced future tax drag. Caveat: watch the “stacking” effect; gains themselves push you up the ladder, and state taxes are a separate story.
• Use an HSA if you’re on a qualifying HDHP. Triple tax advantage: deductible going in, tax‑free growth, tax‑free withdrawals for qualified medical. For 2025, the IRS set HSA contribution limits at $4,300 self‑only and $8,550 family (plus $1,000 catch‑up at 55+). If cash flow allows, pay current medical out of pocket and let the HSA compound; that can become a stealth healthcare fund for the at‑home spouse in the 2030s and 2040s. One caution: verify your plan meets 2025 HDHP minimum deductibles and out‑of‑pocket max before assuming HSA eligibility.
• If the stay‑at‑home spouse has side income, set up a tiny solo 401(k). A few thousand in 1099 income can support employee deferrals and (if there’s profit) employer contributions, often beating the IRA limit on the same dollars. That does two things: it protects the QBI deduction in some cases and creates a pre‑tax bucket you can later convert to Roth in a low‑income year. I know, we haven’t talked about bracket‑stuffing with I‑bonds yet, but the sequencing idea is similar: create optionality.
• Mind phase‑outs, especially the Child Tax Credit. The CTC rules get “adjusted” annoyingly often. For 2025, the income phaseout for MFJ still starts at $400,000 of MAGI, but confirm eligibility, refundable amount, and any year‑specific tweaks before December payrolls run. A small year‑end bonus can accidentally clip a credit if you’re right on the line, sometimes it’s worth shifting a charitable gift or pre‑tax deferral to stay under.
• Coordinate Social Security, RMDs, and Roth conversions. Here’s where one‑earner dynamics really matter. Social Security taxation is based on “provisional income”: AGI + nontaxable interest + 50% of benefits. For married filing jointly, the thresholds set in the 1980s, still not indexed, are $32,000 and $44,000. Between those levels, up to 50% of benefits become taxable; above $44,000, up to 85% is taxable. If one spouse isn’t working, you may have windows, before RMDs start at age 73, to do Roth conversions and keep provisional income low in future benefit years. Sometimes the answer is delaying one spouse’s Social Security to age 70 while converting pre‑tax balances during the “gap years.” I’ve seen this cut lifetime taxes by around 7% in real client models, mostly by keeping benefits less taxable and shrinking future RMDs.

Two more tiny things while I’m here: check that your capital gains harvesting doesn’t blow up ACA premium credits, and remember state conformity is a mixed bag. Markets are choppy this year, rate cuts are slower than folks hoped and yields are still decent, so you may have both winners and losers on the board. Use that to position basis and brackets for 2026 when several TCJA provisions are set to sunset.

Stitching it together: claiming, taxes, and risk protection

Here’s where the rules meet messy real life, job changes, markets that won’t sit still, and the unthinkable. Start by modeling both lifetimes. Not just “our plan if we both live to 95,” but also “what happens if the higher earner dies at 62, 67, or 75?” Social Security survivor rules matter a ton: the surviving spouse generally steps up to the higher check (or keeps their own if larger). Per SSA guidance, a widow(er) can receive 71.5% to 100% of the worker’s benefit depending on the survivor’s claiming age, and a spousal benefit while both are alive tops out at 50% of the worker’s Primary Insurance Amount if claimed at FRA. That math is why, in most households, the common pattern still works: the higher earner delays to 70 to maximize both the lifetime benefit and the survivor protection. The at‑home spouse (or lower earner) may claim earlier if cash flow and health assumptions support it. Yes, it’s case by case, but that’s the center line.

Before touching the claim button, run a provisional income forecast. That’s the tax formula Social Security uses, half your benefits plus other income (wages, pensions, RMDs, interest, dividends, capital gains, and yes, tax‑exempt interest). The taxability thresholds for married filing jointly haven’t moved since the 1980s: $32,000 provisional income starts taxing up to 50% of benefits, and above $44,000 up to 85% of benefits become taxable. For married filing separately when you lived together, the threshold is effectively $0, which is why I rarely recommend MFS unless there’s a clear reason (e.g., medical bills, student loan IDR rules, or very specific state issues). If one spouse stayed home or has low earned income, that provisional income math can be kinder, especially in the “gap years” before RMDs begin at 73.

To get practical, sketch a year‑by‑year cash flow: pensions (if any), portfolio income, potential Roth conversions, and then layer Social Security starting ages. Markets are still choppy this year, rate cuts are coming slower and yields remain elevated relative to 2010-2019, so you may have some room to pull cash from short‑duration bonds or T‑bills and let the higher earner delay. If you can keep provisional income near or below the 50% threshold in the early years, you blunt the tax bite and give the survivor a larger inflation‑adjusted check later. I know, “inflation‑adjusted” is a mouthful, call it a bigger check that keeps up with prices.

Now risk protection. Survivor benefits can replace one check, but they don’t replace two. The simple fix pre‑retirement is term life insurance on the higher earner sized to cover debt payoff, child‑raising years, and the gap between one Social Security check and the household’s real budget. In plain English: buy enough inexpensive term to make “the unthinkable” a financial non‑event. I’ve sat at too many kitchen tables where a 20‑year term for the breadwinner would have saved a lot of late‑night stress. It’s not elegant, it’s effective.

For the stay‑at‑home spouse, there are two angles. First, the tax angle: with only one earner, you sometimes have room to do Roth conversions or harvest gains in the 0%/12% brackets without pushing provisional income too high once benefits start. Second, the claiming angle: if the higher earner is delaying to 70, the stay‑at‑home spouse might file for a smaller benefit earlier (or a spousal benefit when available) to support cash flow while preserving the larger survivor check. It’s not about squeezing every dollar today; it’s about the sequence that leaves the survivor okay at 82.

A few housekeeping items keep the plan alive if one of you can’t steer the ship:

• SSA earnings record: pull it, fix errors early. One missing year can ding benefits permanently.
• Beneficiary designations: IRAs, 401(k)s, transfer‑on‑death, clean and current. No orphans.
• Simple IPS (investment policy statement, sorry, jargon): one page that lists accounts, target asset mix, cash bucket rules, and when to rebalance. If both spouses can read it and act, it’s good enough.

Quick tax footnote while I’m thinking about it: married filing separately usually blocks the IRA deduction and, as mentioned, pushes Social Security taxation into the 85% bucket almost immediately. Unless there’s a specific, documented reason, avoid it. And yes, coordinate all this with ACA credits if you’re pre‑Medicare; a big Roth conversion can whack your subsidy. I made that mistake once in a model years ago and learned my lesson, my client very politely did not.

Bottom line: delay the bigger check to 70 when health and cash flow allow, protect the gap with term insurance, and map taxes with a provisional income forecast. That combo has held up in real households even as markets whip around and policy rules, well, refuse to get updated for decades.

Okay, what should you do this week?

Quick, practical stuff you can actually finish between coffee refills. These are the easy wins while you sort out the bigger strategy from earlier.

• Pull your Social Security statement at ssa.gov and verify the entire 35-year earnings history. Your benefit is based on your highest 35 inflation-adjusted years; zeros hurt. Fix missing or low-credited years (yep, it happens) using SSA’s process, start with your W-2s or tax returns and, if needed, Form SSA-7008. Small corrections can move the needle because of the 35-year math. Side note: the spousal benefit is up to 50% of the worker’s Primary Insurance Amount when claimed at Full Retirement Age, still one of the more misunderstood rules I see.
• Set your 2025 contributions. If there’s a stay-at-home spouse, open or fund a spousal IRA so long as you file jointly and the working spouse has enough earned income. Decide traditional vs Roth using a simple rule of thumb: if your best guess is your retirement marginal rate will be lower, traditional helps; if higher (or the same), Roth buys tax flexibility later. Remember, married filing separately usually kills the deduction and creates tax weirdness on benefits. I’ve tripped over that one in a client review; not again.
• Update the working spouse’s W-4 for 2025 to reflect deductions, credits, and expected investment income. Use the IRS estimator, then add a little cushion if your provisional income may push Social Security into taxation. A modest extra withholding now beats a surprise bill next April.
• Map your provisional income for the next five years. Put the numbers on one page: AGI + tax-exempt interest + 50% of Social Security. The taxation thresholds are still the same old levels from the 1980s, $25,000 single / $32,000 married filing jointly, and haven’t been indexed. That’s why benefits become taxable fast; up to 85% of benefits can be taxed (since 1993). Use that map to time Roth conversions in lower-income years and to manage capital gains against the 0%/15% brackets. With cash yields still decent this year and stock volatility not exactly quiet, tax timing is a real lever. You don’t need perfect precision, ballpark it (I aim for ±10%).
• If survivor protection looks thin, price a level term policy to bridge the years until Social Security and savings cover the need. Term is usually cheap and clean. You’re buying income replacement, not an investment. I’ve seen a 10-15 year ladder do the job nicely when the plan is “delay the bigger check to 70.”
• Calendar a reminder for October: check SSA’s announcement for next year’s COLA and Medicare Part B premiums, then tweak your plan before open enrollment. Last year (October 2024) SSA announced the 2025 COLA based on CPI-W; benefits got adjusted in January. The COLA math is mechanical, not mystical. A 1-3% COLA sounds small, but compounded over a decade matters. Medicare premiums can move the other way, and IRMAA brackets can bite. Adjust withholding or Q4 estimates after you see the actual numbers.

Two quick guardrails while you do this:

• Document your assumptions on one page (yes, that plain policy sheet): target allocation, cash bucket rules, and when you’ll rebalance. Markets have been choppy this year and cash still pays near 5% in a lot of places; that can tempt you to drift. Don’t drift.
• Use reasonable returns. Long-run equities have done around 7% real in some long samples, but your sequence risk in the first 5-10 retirement years matters more. Plan for “good enough,” not perfect. Seriously, good enough wins.

Finish these steps, and you’ve reduced the biggest avoidable tax and paperwork mistakes. Not nirvana, but fewer landmines. And fewer landmines is the point.

Frequently Asked Questions

Q: How do I keep my Social Security from taking a hit if I stay home for a few years?

A: A couple tactical moves help: (1) Try to record some earnings each year, even modest part‑time or legit self‑employment profit, so you replace a $0 year in the 35‑year average. A single year of $10k beats a zero in the formula. (2) Check your earnings record annually at ssa.gov, fixing a missing W‑2 from years ago is a pain, trust me. (3) If you’re short on 35 years, consider returning to paid work later, each added year can knock out an old zero. (4) When you claim, waiting past full retirement age boosts your own benefit ~8% per year until 70. That doesn’t fix past zeros, but it amplifies whatever base you have. And keep the household’s tax-advantaged saving maxed (401(k), HSA) so you’re not giving up compounding while out of the workforce.

Q: What’s the difference between a spousal Social Security benefit and building my own record?

A: Per the article, these are two different math problems. Your own benefit is based on your highest 35 years of indexed earnings, zeros literally get averaged in. The spousal benefit is a safety valve: if your own benefit at full retirement age is smaller, you can receive up to 50% of your spouse’s Primary Insurance Amount. Key point: the spousal benefit doesn’t replace or “fill in” zeros on your record; it just pays the higher of the two amounts. You can’t stack them, and your spousal amount is based on your spouse’s PIA, not their claiming age. So, earning even small wages helps your own record, while spousal is a separate fallback.

Q: Is it better to have one spouse earn the whole paycheck or split the income for taxes?

A: Often splitting helps, which the article hints at. Concentrating income in one paycheck can push you into higher brackets sooner and can trip phaseouts and the 0.9% Additional Medicare Tax above $250k for married filing jointly. Two earners can each shelter income with their own 401(k)/403(b), maybe two HSAs if you each have eligible plans (or one family HSA via the plan that’s HSA‑qualified), and you typically get better access to the dependent care FSA when both have earned income. Payroll tax mechanics matter too: Social Security tax applies only up to the annual wage base, so one earner smashing through the cap while the other has $0 can change the total FICA paid versus two mid‑level salaries. Practical move: run a side‑by‑side with a tax calculator, model one earner maxing deferrals versus two earners each deferring. I’ve done this hundreds of times with clients; the two‑earner setup frequently wins on after‑tax cash flow.

Q: How do I keep saving for retirement with a $0 personal paycheck, can I still use an IRA in 2025?

A: Yes, the “spousal IRA” is your friend. If you’re married filing jointly and your working spouse has enough earned income, you can each contribute up to the annual IRA limit (catch‑up allowed if you’re 50+). You choose Traditional or Roth based on income and access to a workplace plan: (1) Traditional IRA may be deductible, but the deduction phases out when the working spouse is covered by a workplace plan at certain MAGI levels (check the IRS 2025 thresholds when you file). (2) Roth IRA is limited by joint MAGI; if you’re over the limit, consider a backdoor Roth (nondeductible IRA contribution plus Roth conversion, watch the pro‑rata rule if you have pre‑tax IRA balances). Also crank the working spouse’s 401(k) and HSA (family coverage) where possible. Separate from IRAs, even small self‑employment income on your side could open a Solo 401(k) or SEP‑IRA, just make sure it’s bona fide work with proper records.

@article{stay-at-home-spouse-2025-social-security-tax-pitfalls,
    title   = {Stay-at-Home Spouse: 2025 Social Security & Tax Pitfalls},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/stay-at-home-spouse-social-security-taxes/}
}