“Working While Collecting Social Security”
Your decision on when to start collecting Social Security benefits is a personal one depending on your own specific situation. There are ways to maximize your benefit, but once again there are several factors to consider such as your current cash needs, your current health, and family longevity to name a few.
You can work while you receive Social Security retirement benefits, however if you are younger than full retirement age and make more than the yearly earnings limit, your earnings 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 2018, that limit is $17,040.
In the year you reach full retirement age, social security will deduct $1 in benefits for every $3 you earn above a different limit. In 2018, the limit on your earnings is $45,360 but they will only count earnings before the month you reach your full retirement age.
When you reach full retirement age, beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
Before you make any decisions about your social security benefits, please make sure you understand all the rules that go along with your decision. If you decide to work and collect your social security benefits, please make sure you need the income, review the income limits and please do consider not taking social security before full retirement age and the impact of building up your social security benefits. This decision affects the monthly benefit you will receive for the rest of your life and may affect benefit protection for your survivors.
Catherine Magaña is a CFP® or CERTIFIED FINANCIAL PLANNER TM and Managing Partner at Savvy Women Wealth Management in Carlsbad California.
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Sources for Reference:
https://www.ssa.gov/planners/retire/whileworking.html
https://www.ssa.gov/pubs/EN-05-10147.pdf