working while collecting ss
Millions of Americans are or will depend on collecting social security benefits as their primary income source. However, Americans may draw their benefits upon hitting their retirement date while continuing to work. The information below will discuss how working while receiving benefits works.
The choice to begin receiving your benefits at the earlier age will result in you earning a lower monthly amount over the rest of your lifetime.
If you were born after 1937, you are eligible to apply for and start receiving your Social Security retirement benefits at the age of 62. However, you will not be eligible for full SSI retirement benefits until between the age of 66 and 67.
This depends on the year you were born. For example, if you were born in 1955 you can receive full benefits at the age of 66. Two months are added for every birth year afterwards until the full retirement age reaches 67. The choice to begin receiving your benefits at the earlier age will result in you earning a lower monthly amount over the rest of your lifetime.
Waiting until you reach full retirement age has its benefits. For those born between 1943 and 1954, the full retirement age is 66. Born in 1955? Then your full retirement age is 66 plus 2 months. For each year until 1960, add 2 months. For anyone born in 1960 and after, you will reach full retirement age at 67 years old.
For a variety of reasons, both 62 and 67 are quite young by American standards. Many people are still quite active during this time. In fact, a lot of people want to keep working. Additionally, SSI benefits seldom provide enough money for an individual or couple to live on based on their established standard of living.
For these reasons, The Social Security Administration (SSA) issues certain guidelines. This provides a path for people to continue working while drawing Social Security benefits prior to reaching full retirement age.
In a perfect world, an individual will have a pension and 401K savings to live on with their Social Security benefits acting as extra source of income. The reality is you may need to work at least part-time to make ends meet. If so, you need to understand the following guidelines and how they will affect the amount of your monthly benefits.
Please note the following information is applicable to 2023 only.
If you will be under the age of full retirement (ages 66 to 67) for all of 2023, you can earn a working income of up to $21,240 in the calendar year without it affecting the amount of your monthly benefit. For every $2 of working income you exceed that amount during the calendar year, the SSA will reclaim $1 of your SS benefits.
Example: You are 63 years old and receive working income of $22,000 during 2023. That puts you $760.00 above the SSA’s threshold. Your yearly benefits will be reduced by $380.00.
There is good news, however. Benefits that are reduced because of your working income are only temporary. Once you reach the age of full retirement, your benefit amount will be recalculated. In other words, you will receive credit for the amount withheld and your earnings. You will see this reflected in the amount of your check.
Therefore, if your health permits and you are able to continue working until your full retirement age, you will definitely make out better in the long run.
If you hit full retirement age (66 to 67 years old) during 2023 the rules are different. The amount of working income you can make without affecting your SSI monthly benefit is $56,520 annually. Only the amount you earn in the months prior to reaching full retirement age will be applicable.
For every $3 of working income that you exceed the limit, $1 will be deducted from your SS benefits the following year.
Example: You will hit full retirement age in August. From January through July, you earn $61,000. That puts you $4,480 above the SSA’s threshold. The SSA will reduce your benefits for the next year by $1,027 ($3,080 / 3).
From the month you reach full retirement and afterword, you can earn as much working income as you want without affecting your monthly SS benefits. There are no longer any limits on your earnings.
Not all of your annual income is included in SSA’s earnings test. It’s only applicable to your working income, which is defined as gross wages paid from your salary or the net income you earn from self-employment. Forms of income that are excluded from the calculation include gambling, pension, interest, investment income or money from inheritances.
Working while collecting social security can improve your life style in retirement. However, be sure to do your homework and decide how much you should earn versus waiting to retire until you have reached the age of full retirement.
There are millions of senior citizens collecting Social Security retirement benefits. With that, the retirement benefits program also has many rules that need to be followed. When the rules are followed, you can expect to enjoy the most that your benefits can provide. Knowing this, there are a few questions below concerning Social Security that we have answered for you.
If you are collecting Social Security payments and you also get a family inheritance, it is important to know if your benefits will be affected.
Under normal circumstances, getting a monetary inheritance will not count as income if you are receiving retirement benefits, so your eligibility should also not be affected. If you are getting disability income from the SSA, then the inheritance will affect it because the disability income is based on a limited income level.
The primary rule for collecting Social Security benefits is to have the required amount of hours worked throughout your life. These hours start with the very first employer that you work for. For the times that you work for yourself, they count the amount you earned after all expenses have been deducted.
Your earnings are counted as soon as you earn them and not once obtained on a payday. Self-employed income gets counted once you are paid.
If an individual is collecting supplemental income, the SSA will review the bank account as part of the process. The supplemental income program uses the review of bank accounts to determine that a benefactor is below the monetary requirement.
When a retiree is collecting Social Security, the SSA will not look into an account because the benefits are determined by work history. So, if an individual meets the required amount of hours worked, then the benefits will be paid regardless of how much money the retiree has in the bank.
When individuals collect supplemental Social Security, the program is to benefit those who are disabled or unable to work. The SSI program is to ensure that only those with a genuine need for benefits can get them.
But if the beneficiary has enough money in the bank, then they will not be paid any benefits. As part of the sign-up process for SSI, you are required to grant permission to your bank account for a monthly review. This will ensure that your information is true. They will conduct these checks initially as well as other times while you are a part of the program.
Collecting Social Security retirement will not be affected if you sell your home, as SSA does not see it as an earned income. If you have benefits that are means-tested, then your retirement amount will be unaffected. If you earn any type of credit while receiving retirement benefits, then they will not influence your benefits.
If you are in doubt about what may make an effect on your retirement benefits, then you should get in touch with the SSA to get the most current information that applies to your case. If you are unsure of how the sale of your home will affect your disability benefits, then you should get in touch with your caseworker to explore your options.
The most common way to have your Social Security benefits increased is when the COLA is adjusted to a higher amount. The cost-of-living allowance will be adjusted to be equal to the rise in inflation occurs. It is actually a law that when the COLA raises, then all benefits will also rise.
Just because you have hit the retirement age to collect Social Security, does not mean you are required to. In fact, if you want to wait until you hit the full retirement age of 70, then you can. However, when you are 70, you will collect your full amount of monthly benefits.
If you put off retiring for a while, make sure that you have another source that you can live on having no financial worry. If you are thinking about collecting Social Security benefits now, then you can easily apply through a local SSA office, online through the Social Security Administration website or by calling them.
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