Can I still work while collecting social security? This is a common question among individuals approaching retirement age or currently receiving social security benefits. The answer depends on various factors, including the amount of income you earn and the specific rules and regulations set by the Social Security Administration (SSA). In this article, we will explore the conditions under which you can work while collecting social security benefits and the potential impact on your monthly payments.
Firstly, it is important to understand that the SSA has specific rules regarding work and social security benefits. Generally, if you are receiving social security benefits and you earn more than a certain amount, your benefits may be reduced. This limit is adjusted annually and depends on your age at the time you start receiving benefits.
For individuals who are younger than full retirement age (FRA), which is typically between 66 and 67, the SSA imposes a strict earnings limit. In 2023, the limit is $19,560 per year. If you earn more than this amount, $1 will be deducted from your social security benefits for every $2 you earn above the limit. This deduction is known as the earnings test.
However, once you reach your FRA, the earnings limit is significantly higher. In 2023, the limit is $50,520 per year. For every $3 you earn above this limit, $1 will be deducted from your benefits until the month you reach your FRA. After reaching your FRA, there is no earnings limit, and you can continue to work without affecting your social security benefits.
It is worth noting that if you are receiving social security benefits and you decide to work, you can still choose to defer your benefits until a later age. By doing so, your monthly benefits will increase, as the SSA applies a delayed retirement credit. This credit is worth 8% per year for each year you defer benefits beyond your FRA, up to age 70.
Additionally, it is important to consider the tax implications of working while collecting social security benefits. If your combined income (your earned income plus one-half of your social security benefits) exceeds a certain threshold, you may be required to pay taxes on your benefits. The threshold varies depending on your filing status and whether you or your spouse are receiving taxable income from other sources.
In conclusion, the answer to the question, “Can I still work while collecting social security?” is yes, under certain conditions. By understanding the earnings limits, the impact on your benefits, and the tax implications, you can make informed decisions about working while receiving social security benefits. It is always recommended to consult with a financial advisor or the SSA to ensure you are making the best choices for your retirement.
