18
April 2017
Dear Savvy Senior , I ’ m considering retiring later this year and starting my Social Security benefits , but would also like to work part time . Will this affect my benefits , and if so , how much ? Ready to Retire
Dear Ready ,
You can collect Social Security retirement benefits and work at the same time , but depending on how old you are and how much you earn , some or all of your benefits could be temporarily withheld . Here ’ s what you should know .
Working Rules
Social Security says that if you are under your full retirement age – which is 66 if you were
born between 1943 and 1954 , or 66 and two months if you were born in 1955 – and are collecting benefits , then you can earn up to $ 16,920 in 2017 , without jeopardizing any of your Social Security if you don ’ t reach your full retirement age this year . But if you earn more than the $ 16,920 limit , you ’ ll lose $ 1 in benefits for every $ 2 over that amount .
In the year you reach your full retirement age , a less stringent rule applies . If that happens in 2017 , you can earn up to $ 44,880 from January to the month of your birthday with no penalty . But if you earn more than $ 44,880 during that time , you ’ ll lose $ 1 in benefits for every $ 3 over that limit . And once your birthday passes , you can earn any amount by working without your
PRIME TIME
How Working In Retirement Can Affect Your Social Security Benefits
benefits being reduced at all .
Wages , bonuses , commissions and vacation pay all count toward the income limits , but pensions , annuities , investment earnings , interest , capital gains , and government or military retirement benefits do not . To figure out how much your specific earnings will affect your benefits , see the Social Security Retirement Earnings Test Calculator at SSA . gov / OACT / COLA / RTeffect . html .
It ’ s also important to know that if you do lose some or all of your Social Security benefits because of the earning limits , they aren ’ t lost forever . When you reach full retirement age , your benefits will be recalculated to a higher amount to make up for what was withheld . For details
and examples of how this is calculated , see SSA . gov / planners / retire / whileworking2 . html .
For more information on how working can affect your Social Security benefits , see SSA . gov / planners / retire / whileworking . html , or call Social Security at 410-965-2039 and ask to receive a free copy of publication number 05-10069 , “ How Work Affects Your Benefits .”
Tax Factor
In addition to the Social Security rules , you need to factor in Uncle Sam , too . Because working increases your income , it might make your Social Security benefits taxable .
Here ’ s how it works . If the sum of your adjusted gross income ,
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