Working and Social Security Benefits

Cancer Curious?
May 8, 2021
Cancer Curious?
May 8, 2021

Do You Want to Keep Working and Collect Social Security Benefits

Many of those over 65 question if they should start receiving their Social Security benefits. How do you make that decision? Unfortunately, there isn’t a one-size fits all answer to what you should do. However, with the right facts about how it works you should be able to make a more educated decision. Now that it’s more common than ever for individuals to be working or have a spouse who is working past 65, this is a common discussion. The things to think about when you are close to retirement are: “What age is my full retirement?” “Do I need the Social Security income now?” And what I want to focus on right now is the question, “Will I lose benefits if I am continuing to working?” The answer from Social Security’s website is as such:

“If you’re younger than full retirement age and if your earnings exceed certain dollar amounts, some of your benefit payments during the year will be withheld.”

Let me explain a little more in detail. The limit in 2025 is $23,400. If you earn more than this limit and are under your full retirement age, Social Security must deduct $1 from your benefits for each $2 you earn above the limit. Interestingly, this deduction is not lost forever. HORRAY! Social Security will pay a higher monthly benefit when you reach full retirement age. So if you work and surpass the limit, don’t be too hard on yourself as you will see it added back in to your Social Security when you reach full retirement. If you were born January 2, 1960 or later, then your full retirement age for retirement insurance benefits is 67.

Social Security states, “So, if you work and earn more than the exempt amount, it won’t, on average, decrease the total value of your lifetime benefits from Social Security — and can increase them.”

If you want to work and are at full retirement age you may keep all of your benefits, no matter how much you earn.

Those who collect Social Security disability benefits or Supplemental Security Income have different rules and must report all earnings to Social Security.

So long story short, if you want to work and collect Social Security benefits before your full retirement age, you have the option to do so with a limitation. If you make over the limit set for that year, you will have a deduction but will get it back later. I have met so many clients worried about this exact scenario, and I think it’s mostly because they think the deduction is their earned money being lost forever. But now you know– that is not the case.

Social Security has an abundance of information on their website about retirement. There is a calculator you can use to see what you will make at different ages based on your employment income data. Using the online tools saves you a phone call to Social Security, and allows you to track changes over the years.

Contact me today with your questions – 724-879-5030 or AClayton@ispa1.com