When can I collect social security and still work? This is a common question among many individuals approaching retirement age. Understanding the rules and regulations surrounding social security benefits and employment can help you make informed decisions about your financial future. In this article, we will explore the key factors to consider when determining when you can start collecting social security benefits while still working.
Firstly, it’s important to know that the age at which you can begin collecting full retirement benefits is 66 for those born between 1943 and 1954. However, if you were born after 1954, your full retirement age will gradually increase until it reaches 67 for those born in 1960 or later. This means that if you choose to start collecting social security benefits before reaching your full retirement age, your monthly payments will be reduced.
Under the Social Security Administration’s rules, you can start collecting benefits as early as age 62. However, if you choose to do so, your monthly benefits will be permanently reduced by a certain percentage for each month before your full retirement age. For example, if you start collecting benefits at age 62, your monthly benefit will be reduced by approximately 5.8% for each month before your full retirement age.
On the other hand, if you wait until after your full retirement age to start collecting benefits, your monthly payments will increase. This increase is known as the delayed retirement credit, and it applies to each month you delay collecting benefits beyond your full retirement age. For each month you delay, your benefit amount increases by approximately 8% until you reach age 70, when the increase stops.
When considering whether to work while collecting social security benefits, it’s crucial to understand the earnings limit. If you are under your full retirement age and earn more than a certain amount, your social security benefits may be reduced. For those born in 1960 or later, the earnings limit is $18,960 in 2023. For every $2 you earn above this limit, $1 will be deducted from your social security benefits.
Once you reach your full retirement age, there is no earnings limit, and you can continue working without affecting your social security benefits. However, if you choose to work after reaching your full retirement age, your benefits will not be reduced, but the amount of money you earn may affect your tax liability.
In conclusion, the decision of when to collect social security benefits while still working depends on your individual circumstances, including your full retirement age, earnings, and financial goals. By understanding the rules and regulations, you can make an informed decision that best suits your needs. It’s always a good idea to consult with a financial advisor or the Social Security Administration to ensure you are making the most of your social security benefits.
