Working while you’re retired can be a great way to stay active and social, and for many people it’s a necessity. Americans over age 65 had about $4,818 on average in expenses per month, according to the latest data from the Bureau of Labor Statistics. However, the workers retired they only obtained an average of $1,918 per month from Social Security in 2024, meaning it covered less than 50% of monthly expenses.
Earning extra income can help bridge this gap, but if you start receiving the Social Security before reaching the age of retirement complete, you may lose some of your benefits if you earn too much. Earning less than the annual income limits can also negatively affect the amount of your benefit, based on your work and income history. For people who plan to work indefinitely, wait until you reach full retirement age to apply for benefits. Social Security can be beneficial.
We Look at How Work Can Affect Your Social Security Benefits
Among them, the limits, tax implications and maximizing your benefits. But keep in mind that the rules and exemptions can vary greatly depending on where you live, how much you earn, and other personal circumstances, so it’s best to discuss this with a tax professional, CPA, or trusted financial advisor to help you. Guide you in more detail as you prepare for the retirement.
If you want to know how much income you can earn while you are in the Social Security, the answer is that, technically, there is no limit to the amount you can earn from the Social Security. However, you will lose a part of your benefit If you enroll in the Social Security before reaching the age of full retirement. The full retirement age (FRA) is the age at which you can receive all the benefits of the Social Security without any penalty for earning more additional money. His FRA It can vary between 65 and 67 years, depending on the year you were born. The Administration of Social Security puts at your disposal a retirement calculator online to help you find your FRA.
How Pre-retirement Income Affects Your Benefits Of Social Security
The Administration of Social Security treats income before retirement age differently, depending on how close you are to your FROM:
- In the years before he reached FROM, the SSA deduct $1 for every $2 you earn above $22,320.
- In the months before your deadline retirement, the SSA deduct $1 for every $3 you earn above $59,520. This does not apply to the month in which you reach your deadline of retirement.
Let’s say you signed up to receive the benefits of the Social Security three years before reaching the age of early retirement. If you earned $70,000 that year, you would lose $23,840 in benefits of the Social Security. However, if you signed up to receive the benefits of the Social Security the year he reached FROM and had that same $70,000 salary, he wouldn’t reach his annual limit on a $70,000 salary unless he had a birthday in December. But, let’s say you received a raise and earned $70,000 in the months before you hit your minimum salary threshold. In that case, you would lose about $3,493 in benefits of the Social Security that year.
The Mid-Year Retirement Loophole
The Administration of Social Security has a special rule that exempts those who retire and request the Social Security mid-year before reaching its FRA. To qualify for this exemption, your monthly income must be below a certain threshold, which depends on how close you are to your FRA:
- If you retire more than one year before reaching your FRA, you will receive the benefit complete of Social Security for any month in which you earned $1,860 or less.
- If you retire months before reaching your FRA, you will receive your benefit complete of Social Security for each month you earned $4,960 or less.