Can you still work and collect social security at 62? This is a question that many individuals approaching retirement age often ask. With the increasing cost of living and the desire to maintain a comfortable lifestyle, understanding the rules and regulations surrounding social security benefits can be crucial. In this article, we will explore the possibilities and limitations of working while collecting social security at the age of 62.
Firstly, it is important to note that individuals are eligible to start receiving social security benefits at the age of 62. However, if you choose to collect benefits at this early age, your monthly benefit amount will be reduced permanently. This reduction is based on the number of months you receive benefits before reaching your full retirement age (FRA), which is typically between 66 and 67 depending on your birth year.
While you can still work and collect social security at 62, there are certain income limits to consider. If you earn more than $18,960 in the year you reach age 62, your social security benefits will be reduced by $1 for every $2 you earn above that limit. This means that your benefits will be reduced by 50% of the income earned above the limit. However, it’s important to note that this income limit does not apply once you reach your FRA.
Another important factor to consider is the earnings test exemption. If you are disabled and collecting social security disability benefits, you may be exempt from the earnings test. However, if you are not disabled, the earnings test applies until you reach your FRA. Once you reach your FRA, you can work and earn as much as you want without any reduction in your social security benefits.
It is also worth mentioning that if you continue to work after collecting social security benefits, you may be required to pay taxes on your benefits. The amount of tax you pay depends on your total income, including your social security benefits. If your combined income (your adjusted gross income plus half of your social security benefits) is above a certain threshold, you may be subject to income tax on a portion of your benefits.
In conclusion, while it is possible to work and collect social security at the age of 62, there are important considerations to keep in mind. Understanding the income limits, the earnings test, and potential tax implications can help you make informed decisions about your retirement plan. It is always advisable to consult with a financial advisor or social security representative to ensure that you are maximizing your benefits while still enjoying the benefits of working.
