Social Security Benefits for Workers Over 65

by W D Adkins

    The Social Security Administration allows you to receive your retirement benefits after age 65 even if you choose to continue working. However, a number of factors can affect how much money you get, and whether your benefits are subject to income taxes. Know the rules to avoid any unpleasant surprises.

    Retirement Age

    Once you are over 65, meaning as of the month you turn you turn 66, you have reached full retirement age for Social Security purposes. This applies if you were born from 1943 through 1954. If you continue to work past full retirement age, your pay or self-employment earnings won’t affect the amount of your retirement benefits. The full retirement age is scheduled to gradually increase for people born after 1954, and it will be 67 for those born after 1959.

    65 or Younger

    You can start retirement benefits as early as age 62. If you do and if your work income exceeds a cap set by the Social Security Administration, your benefits might be reduced. As of 2013, you'd lose $1 for every $2 of income from work in excess of $15,120. During the calendar year you turn 66, the limit is higher. You could earn an average of $3,340 each month before the month you turn 66, and you'd lose $1 for every $3 you earned over this limit.

    Taxes on Benefits

    The Social Security Administration isn’t interested in your work income after full retirement age, but the Internal Revenue Service is. If your adjusted gross income, including wages and self-employment earnings, exceeds $32,000 and you file a joint tax return, at least 50 percent of your Social Security benefits might be taxable. For single-filers, the threshold is $25,000. If your adjusted gross income is less than these threshold amounts, none of your benefits are taxable.
    The proportion of your benefits that are taxable can go up to a maximum of 85 percent if your adjusted gross income tops $44,000 and you file a joint return. If you file as single, you reach this maximum when your adjusted gross income is $34,000.

    Deferred Benefits

    You don’t have to start your Social Security benefits at age 66. If you choose to continue working and wait, you can increase the amount of your monthly benefit by up to 32 percent. You get an 8 percent increase if you defer benefits until the month you turn 67, 16 percent extra if you wait until you are 68, and 24 percent if you don’t start benefits until you are 69. Delay retirement benefits until age 70 and you receive the maximum of 32 percent extra.
    This rule isn’t affected by Medicare coverage. You can start Medicare insurance at age 65. Finally, neither the increased benefit amount nor your Medicare coverage is affected if you continue working.

    About the Author

    Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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