SOCIAL SECURITY AGE CONSIDERATIONS
DOES WORKING AFFECT BENEFITS?
Some individuals retire and begin to collect their hard-earned Social Security retirement benefits. What happens if they decide to work in their retirement years?
First, the individual is allowed to receive Social Security retirement benefits and work at the same time. However, if the person is younger than full retirement age and makes more than the yearly earnings limit, the Social Security Administration (SSA) will reduce the recipient’s monthly benefit. Here is how the reduction works.
If you, the recipient, is under full retirement age for the entire year, the SSA deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2018 that limit is $17,040.
In the year you reach full retirement age, it deducts $1 in benefits for every $3 you earn above a different limit, but it only count earnings before the month you reach your full retirement age. If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.
Once the individual reaches full retirement age, the SSA will not reduce the monthly benefit regardless of how much the person earns.
The SSA suggests you use its Calculators to find your full retirement age based on your date of birth and how much your benefits will be reduced by your earnings before you reach full retirement age. The good news is that the SSA does not include as wages monies received from pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits.
Sometimes your benefits may increase when you work. As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings. The SSA will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, the SSA will send you a letter telling you of your new benefit amount.
You can reach the SSA by calling 1-800-772-1213 (TTY 1-800-325-0778) between 7 a.m. to 7 p.m., Monday through Friday, or contact your local Social Security office
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.