LW
Actualizado
Did you know that you can work and still receive Social Security retirement or survivors benefits? It's true, and it could even mean a higher benefit for you and your family. The Social Security Administration reviews the records of all beneficiaries each year, and if your latest year of earnings is one of your highest, they recalculate your benefit and pay you any increase you are due. This increase is retroactive to January of the year after you earned the money.
If you receive survivors benefits, the additional earnings could help make your retirement benefit higher than your current survivors benefit. However, there is a limit to how much you can earn and still receive full benefits.
If you are under full retirement age for the entire year, the Social Security Administration will deduct $1 from your benefit payments for every $2 you earn above the annual limit, which for 2023 is $21,240.
In the year you reach full retirement age, they will deduct $1 in benefits for every $3 you earn above a different limit. For 2023, this limit on your earnings is $56,520. Don't worry, they only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year.
If your earnings will be more than the limit for the year and you will receive retirement benefits for part of the year, they have a special rule that applies to earnings for one year. The special rule lets them pay a full Social Security benefit for any whole month they consider you retired, regardless of your yearly earnings.
Benefits can be recalculated
When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn. They will even recalculate your benefit amount to give you credit for the months they reduced or withheld benefits due to your excess earnings.
It's important to note that when the Social Security Administration deducts earnings from benefits, they only count wages made from your job or your net profit if you're self-employed. They include bonuses, commissions, and vacation pay, but they don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
If you're eligible for retirement benefits this year and are still working, you can use their earnings test calculator to see how your earnings could affect your benefit payments. For more information on how work affects your benefits, be sure to check out their publication on the topic.
I've been deeply immersed in Social Security benefits and retirement planning for years, diving into the intricacies of how work affects benefits, just like the content you shared. This article outlines several essential concepts:
-
Working while receiving Social Security benefits: The Social Security Administration allows individuals to work and still receive retirement or survivors benefits. This includes recalculating benefits annually based on the latest earnings records.
-
Benefit Recalculation: If your latest year of earnings happens to be one of your highest, the SSA recalculates your benefit and pays any increase retroactively to January of the following year.
-
Earnings Limits: There are specific annual earnings limits for beneficiaries. For 2023, the limit is $21,240 if you're below full retirement age, with a deduction of $1 from benefits for every $2 earned above this limit. The limit increases to $56,520 in the year you reach full retirement age, with a $1 deduction for every $3 earned above this higher limit.
-
Special Rules: If your earnings exceed the limit for the year but you'll only receive benefits for part of the year, a special rule allows the SSA to pay a full Social Security benefit for any whole month they consider you retired, irrespective of yearly earnings.
-
Benefit Recalculation at Full Retirement Age: Once you reach full retirement age, your earnings no longer reduce your benefits. The SSA also recalculates your benefit amount to credit you for the months when benefits were reduced or withheld due to excess earnings.
-
Types of Earnings Considered: The SSA counts wages from employment or net profit for self-employed individuals. They include bonuses, commissions, and vacation pay but do not count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
-
Resources for Understanding Benefits: The SSA provides an earnings test calculator to assess how earnings might affect benefit payments. Additionally, their publication on the topic offers comprehensive information on how work impacts benefits.
Understanding these concepts is crucial for individuals navigating Social Security benefits while continuing to work. It's an intricate system, but grasping these details can significantly impact one's retirement income planning.
