What You Should Know About Social Security Retirement Benefits
While it’s possible to collect Social Security retirement benefits while you’re still working, there are some rules that apply which could keep you from earning all of your benefits, according to an article published by the New Jersey Herald.
“Social Security says that if you’re under your full retirement age –which is 66 if you were born between 1943 and 1954, or 66 and 2 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,” the article reads.
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If you earn more than the limit, you will lose $1 in benefit for every $2 you go over the $16,920 amount.
After reaching your full retirement age, there’s still a dollar limit set, but it’s less stringent. If you reach your retirement age this year, you can earn up to $44,880 from January to the month of your birthday with no penalty. If you earn more than the set amount during that time, you’ll lose $1 in benefits for every $3 you go over the limit.
Once your birthday passes, you can earn any amount by working without your benefits being reduced at all. Keep in mind that bonuses, vacation time, commissions and wages all count toward the income limits.
If you do lose some or all of your Social Security benefits because of the earning limits, it’s important to know that they aren’t gone forever. When you finally do reach retirement age, benefits will be recalculated to a higher amount to make up for what was withheld.
When it comes to taxes, working increases your income, therefore it may make your Social Security benefits taxable.
“If the sum of your adjusted gross income, nontaxable interest, and half of your Social Security benefits is between $25,000 and $34,000 for individuals ($32,000 and $44,000 for couples), you have to pay tax on up to 50 percent of your benefits,” according to the article. “Above $34,000 ($44,000 for couples), you could pay on up to 85 percent, which is the highest portion of Social Security that is taxable. About a third of all people who get Social Security have to pay income taxes on their benefits.”