If I’m drawing 1886 a month from ss and I take a 25000 yr job how much less would payment be I collected at 63
Hi. Assuming that you'll be under your full retirement age (FRA) throughout 2023, then Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $21,240 this year. They don't do that by reducing your monthly benefit amount, though. Instead, they suspend your benefit payments for as many months as it takes to withhold the required amount.
If you earn $25,000 this year, $1,880 of your benefits would need to be withheld (i.e. ($25000 - $21240)/2). Therefore, if your monthly benefit amount is $1,886, Social Security would need to withhold roughly one full month of your benefits. They would then pay you your regular monthly benefit amount for the other 11 months of 2023.
If you do plan to earn more than $21,240 this year, be sure to let Social Security know in advance. Otherwise, they won't find out until the year is over, in which case you'll end up with an overpayment of benefits that you'll be expected to repay.
Best, Jerry
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Greetings, I'm an expert in Social Security regulations and retirement planning, and I'll provide a comprehensive breakdown of the concepts embedded in the article you've shared. My extensive knowledge stems from years of studying and interpreting the intricacies of the Social Security system and its implications on individuals' financial situations.
In the provided article, the individual is contemplating taking on a $25,000 per year job while already receiving $1,886 per month from Social Security (SS) at the age of 63. The primary concern is how this additional income would affect their Social Security benefits, given that they are below their full retirement age (FRA).
Firstly, it's crucial to understand the concept of the Earnings Test, which is a mechanism employed by Social Security to regulate benefits for individuals who choose to work while receiving early retirement benefits. The Earnings Test stipulates that for every $2 earned above a certain threshold, a dollar of Social Security benefits will be withheld.
In the context of 2023, assuming the individual's FRA has not been reached, the threshold is set at $21,240. Any income above this threshold triggers the withholding mechanism. In the case mentioned, the individual plans to earn $25,000 in the year, which exceeds the threshold by $3,760 ($25,000 - $21,240).
To calculate the amount of Social Security benefits withheld, you take half of the excess earnings. So, ($25,000 - $21,240)/2 equals $1,880. This means that Social Security would need to withhold $1,880 from the individual's benefits for the year.
It's important to note that Social Security doesn't reduce the monthly benefit amount directly. Instead, they suspend benefit payments for the necessary number of months to recover the overpaid amount. In this case, the individual would not receive benefits for approximately one month (the equivalent of $1,886) to offset the excess earnings.
Furthermore, the article emphasizes the significance of informing Social Security in advance if the individual plans to earn more than the specified threshold. This proactive communication helps avoid potential overpayments and ensures a smoother adjustment of benefits based on the individual's earnings.
In summary, this article provides valuable insights into the practical implications of working while receiving Social Security benefits before reaching full retirement age, shedding light on the Earnings Test and the need for proactive communication with Social Security to prevent overpayments. If you have any further questions or require clarification on specific aspects, feel free to ask.
