Should I pay myself a salary?

I’m 51 and my husband is 53. We own our own S Corp business. He is on track to get around $2,000-$3k a month from Social Security based on the payroll that we give him every month. I do not take a payroll from our S Corp. Is there any benefit for me to also take a payroll so that I get more social security?

We have a Roth and Ira and other sources of income for retirement. But I will be banking on approximately $3,000 a month for Social Security.
I’m not sure if I should contribute and give myself a payroll to bump up my social security.

Is there any other reason why I need to take a payroll or is it okay just to leave payroll running through my husband’s name?

That is really a question you should run by a CPA. There are tax implications to payroll vs draws and likely other considerations I’m not aware of. I doubt you’ll get a trustworthy answer from this forum! Sorry!

Hi Shay,
I’m a recent S Corp owner myself but am a life long supporter of women and the importance of making sure we are just as financially stable as are the men in our life. I would say if you work in the business like your husband, then you should both receive regular paychecks from the company and regular distributions. I say this for a few reasons:

  1. As S Corp owners, you are required to take payroll and not just distributions from the company. There are legal/taxable ramifications if you don’t.
  2. Earning a regular salary up until you retire will ensure a higher monthly social security payout. It’s important to ensure BOTH of the people in the relationship have the highest pay in the last years of their working lives to maximize your monthly social security amount.
  3. There is a mental/emotional benefit to receiving a regular salary! I tell this to all of my business owner clients, you work hard for your business and you should be paid for that work through a regular paycheck. The distributions are icing on the cake and the reward you receive as the business owner.

I hope this helped!

Kelli Bagby

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