Working During Retirement Can Affect Social Security

annuity think tankIf you work and claim Social Security benefits at the same time, part or all of your payments could be temporarily withheld.  Here’s a quick look at how working during retirement could alter your payments.


Age – If you are full retirement age, working has no affect on your payments.  The full age for those born between 1943-1954 is 66 and it increases in two-month increments until age 67 for those born after 1960.


Annual Earnings – if you are younger than the full retirement age, you can earn up to $15,120 without any affect on your Social Security payment.  After that $1 is deducted from your payment for every $2 earned above the limit.  In the year you turn your full retirement age, the earnings limit climbs to $40,080, after which $1 is deducted from your payment for every $3 you earn above the limit. And the earnings limit no longer applies once you reach the month you turn your full retirement age.


Monthly Earnings – people who retire mid-year have already earned more than the annual earnings limit. In this case, there is a one-year exception to the annual earnings limit, and it is replaced with a monthly earnings limit. People who recently retired can earn up to the monthly earnings limit of $1,260 per month in 2013, and still receive Social Security payments even if their earnings exceed the annual earnings limit.


Benefits Withheld – If some or all of your Social Security payments are withheld because you exceeded the earnings limit, your benefit will be recalculated at your full retirement age to give you credit for the withheld benefits.

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