Can I Continue to Work After Collecting Full Retirement Benefits?
Working after you hit retirement age won't affect your Social Security retirement benefits. Even working before you hit retirement only affects them temporarily. Social Security isn't a means-tested program: you don't have to fall below a certain level of income to get your full benefits. Instead, it's based on your earnings through your pre-retirement life.
The federal government has been tinkering with the full retirement age for years, and may do so again, eventually. As of 2013, anyone born in 1960 or later gets full retirement at 67. For anyone born in 1937 or earlier, the age to retire and receive full benefits is 65. For people born between the two years, the full retirement age goes up gradually: for example, it's 65 and four months if you were born in 1939, it's 66 if you were born from 1943 to 1954, and so on.
No matter what year you were born, you can start drawing reduced retirement benefits at 62. As of 2013, you can earn $15,120 in gross wages or net self-employment without getting these early-retirement benefits cut. In the year you reach full retirement age, you can earn up to $40,080 in the months before your birthday without getting a cut. The cut in your birthday year is $1 in benefits for every $3 you earn above the limit. In earlier years, it's $1 for every $2.
Once you hit the full retirement age that your birth year gives you, relax. You can earn as much money as you choose and it won't lower your benefits. If you got your pre-retirement benefits cut, Social Security adds to your benefits in retirement to compensate for what was taken out. The exact calculations vary depending how much you earned, how long you took pre-retirement benefits and how long you worked before reaching full retirement age.
Although working won't cut your benefits, it increases the chance that you'll have to pay tax on them. Take your adjusted gross income for the year, then add nontaxable interest and half your Social Security benefits. As of 2013, if your total is between $32,000 and $44,000 and you're part of a married couple filing jointly, you pay tax on 50 percent of your benefits. Above $44,000, you may owe tax on up to 85 percent. Singles and married couples filing separately pay according to a different set of figures.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.