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Stay on the Job and Collect Social Security, Too

Collecting before retirement can lead to higher benefits in the future


You can work while you receive Social Security retirement (or survivors) benefits. When you do, it could mean a higher benefit for you in the future.

Higher benefits can be important to you later in life and increase the future benefit amounts your family and your survivors could receive.

While you are working, your earnings will reduce your benefit amount only until you reach your full retirement age. After you reach full retirement age the Social Security Administation recalculates your benefit amount to leave out the months when ypour benefits were reduced or withheld due to your excess earnings.

A formula is used to determine how much your benefit must be reduced:

  •     If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2011, that limit is $14,160.
  •     In the year you reach full retirement age, the Social Security Administration deducts $1 in benefits for every $3 you earn above a different limit, earnings are counted only before the month you reach your full retirement age. 
If you will reach full retirement age in 2011, the limit on your earnings for the months before full retirement age is $37,680. 
(If you were born in 1945 or 1946, your full retirement age is 66 years.)
  •     Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.


Caution: If you apply for benefits more than 6 months after you reach full retirement age, the Social Security Administration can only pay the benefits for the previous 6 months.

Note: If your earnings will be over the limit but you will be retired for part of the year, there's a special rule that applies to earnings for one year. The special rule means the SSA cannot deduct excess earnings from any whole month you are consider retired, regardless of yearly earnings.

If you are not already receiving benefits, be sure to contact the Social Security Administration at the beginning of the year you reach full retirement age. Even if you are still working, you may be able to receive some or all of your benefits for the months before you reach full retirement age.

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