Person filling out social security benefits form.

Current statistics show us that you may want to work beyond your retirement age. This could be due to a personal choice, or out of financial necessity. If you are currently receiving Social Security benefits though, you must be aware of how going back to work can affect your payments. Earning income above a certain amount, could cause a reduction in benefits and cause these benefits to be taxed.

Whether it makes sense to work and collect Social Security at the same time is a complicated issue that directly corresponds to how much you earn and when you began receiving Social Security.

If you are now receiving Social Security benefits, Social Security Disability Insurance (SSDI), and/or Supplemental Security Income (SSI) benefits, you must report any changes involving your work activity.

You must tell the Social Security Administration if:

  • You start or stop work.
  • You reported your work, but your duties, hours, or salary may have changed.
  • When you receive Social Security retirement benefits, for our purposes you are retired.

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You can get Social Security retirement benefits and work at the same time. However, there is a limit to how much you can earn and still receive full benefits. Some general guidelines give you an idea of how getting Social Security benefits and working are financially handled.

These include:

  • If you opt for Social Security benefits and are younger than full retirement age (and earn more than the yearly earnings limit) Social Security may reduce your benefit amount.
  • If you are under full retirement age for the entire year, Social Security will deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2021, that limit is $18,960.
  • When you retire at full retirement age, we deduct $1 in benefits for every $3 you earn above a higher yearly limit. In 2021, this limit on your earnings is $50,520.
  • We only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year.

This can be a complex calculation, and the details of your financial situation, when you retire, and what you are entitled to all come into play in the equation. If you have other investments, assets, pensions, etc. it may get even more complex. If you desire all the pertinent facts, consulting with a Tampa social security lawyer will guide you through the entire process. By getting professional advice, you can be assured of knowing the best way to proceed, and what you are rightfully entitled to.

Can I See Some Example Calculations of Getting Social Security Benefits While Working?

Here are a few example calculations:

  • You are under full retirement age all year, and you are entitled to $800 a month in benefits ($9,600 for the year).

You work and earn $28,960 ($10,000 over the $18,960 limit) during the year. Your Social Security benefits would be reduced by $5,000 ($1 for every $2 you earned over the limit). You would receive $4,600 of your $9,600 in benefits for the year. ($9,600 – $5,000 = $4,600)

  • You Reach full retirement age in August 2021 and you are entitled to $800 per month in benefits($9,600 for the year).

You work and earn $63,000 during the year, with $52,638 of it in the 7 months from January through July ($2,118 over the $50,520 limit).

Your Social Security benefits would be reduced through July by $706 ($1 for every $3 you earned over the limit). You would still receive $4,894 out of your $5,600 benefits for the first 7 months ($5,600 – $706 = $4,894).

Beginning in August 2021, when you reach full retirement age, you would receive your full benefit ($800 per month), no matter how much you earn.

  • Remember that Social Security does not count pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits against your deductible income.

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Yes, it’s confusing, and the more assets are involved, the worse it can be. By consulting with a knowledgeable social securities lawyer, all the details can be gone through and explained. You worked hard for your Social Security benefits, and they will be sure you get what you deserve.

Can Working After Full Retirement Age Increase My Social Security Benefits?

When you do reach your full retirement age, you usually can work and earn as much as you want and still be entitled to your full Social Security benefit payment. So, even if you work and earn more than the exempt amount, it won’t usually decrease the total value of your lifetime benefits from Social Security. What you may not know, that working after your full retirement age may increase your benefits.

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If you continue to work and are receiving benefits, you will continue to pay Social Security taxes on your earnings. However, Social Security will check your record every year to see whether the additional earnings you had will increase your monthly benefit.

Is There an Age at Which Social Security Benefits are No Longer Taxed?

Depending on your birth year, if you are 65 to 67, you are at full retirement age and can get full Social Security retirement benefits tax-free. However, if you’re still working, part of your benefits still might be subject to taxation. The IRS adds the figures for your earnings and possibly half your Social Security benefits.

I Am Considering Retirement but Do Want to Work, What Should I Do First?

As you begin to see, this is an intricate and complex issue, but you want to make sure you get all that you worked for and deserve. Your singular financial information needs to be discussed before you make this vital decision. The Tampa law firm of Carlson, Meissner, Hart & Hayslett will professionally review all the particulars of your situation and case. By doing so, they will aggressively, and effectively, pursue the Social Security benefits that you so rightfully deserve. Consult with them first and secure your well-earned retirement benefits.

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