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Can I Work While Collecting Social Security?

3 Things you need to know

Senior couple using electronic tablet at home

A comfortable retirement is a dream for most American citizens, and social security benefit payments may factor into just how comfortable your retirement will be. The monthly payment can help you set a budget, finance your lifestyle and enjoy your retirement, but there is a lot to learn before you make the leap. Many soon-to-be retirees are curious about whether they can work once they begin receiving social security. Thankfully, we have the answers.

Can I work while I collect social security?

In short, yes. Working while collecting social security is an option for some individuals, but it may not always be the smartest choice. You may begin claiming social security benefits at 62, but in doing so, you will receive a reduced payment for the life of your benefits. Those who receive social security benefits at 62 and continue to work are capped on the amount of money they can make while still collecting benefits.

In short, it may not be financially smart to collect your social security benefits at 62 and continue to work a full-time job. A part-time job while collecting, however, may be a wise financial decision for those who no longer feel they can continue to work full-time.  

Is there a limit on how much you can earn?

Yes, while you may choose to collect social security benefits and continue working, you are capped at the amount of money you can make while still receiving social security benefits. In 2019, the capped amount is just over $17,000. If you earn more than the capped amount, your social security benefit payment will be reduced by $2 for every $1 over the cap you earn.

The result of over-earning is not a monthly calculation. Instead, the agency responsible for payments will calculate the overage each year. Some individuals may lose several months of payments once their overage is calculated, but that doesn’t mean the money is gone forever. Once you reach full retirement age, the administration will review your earnings and recalculate your payments based on the money that was withheld.

What happens when I reach full retirement age?

Your monthly social security benefit payment will increase based on how much money was withheld while you were working if you decided to begin collecting at age 62. The amount is calculated once you reach full retirement age

You may choose to not receive social security benefits at 62, and instead wait until full retirement age to begin collecting. This will result in a higher monthly benefit payment. If you choose to receive at 62 and continue working, any money withheld will be redeposited into your payment once you reach full retirement age. There is no earning cap once you have reached full retirement age.

If you have more in-depth questions about social security benefits and your ability to work, it is best to speak to a financial planner or accountant about your concerns.

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