The Social Security Administration began awarding benefits in 1936 to protect senior citizens from destitution after retirement. Today's workers pay into the Social Security general trust account and will later be eligible to receive monthly checks. For workers born in 1937, there are no limits on the amount of work or earnings they can earn and still receive monthly checks.
General Rule and Delayed Retirement
The Social Security Administration cannot reduce benefits for anyone choosing to work past the current full retirement age of 66. Since people born in 1937 have surpassed this age, those beneficiaries can work full-time without their benefits being reduced. This is true regardless of how much you make each month. However, if you wish to delay retirement and not yet receive benefits, the Social Security Administration will compound the amount due until you do retire. For beneficiaries born in 1937, delaying retirement until age 70 or later will increase their full retirement benefits by 32.5 percent. Again, this figure is unaffected by the recipient's work status.
For beneficiaries born in 1937 who still work, the increase in income can increase monthly benefits payments if the income surpasses the Social Security Administration's original salary calculation. When beneficiaries first start taking Social Security payments, the agency devises a monthly payment amount based on annual income during their working years. Since anyone born in 1937 is well past full retirement age, the Social Security Administration has already based the monthly payment on past earnings. If you take a job during retirement -- particularly a well-paying job -- the administration will reset those calculations if the retirement income surpasses regular income before retirement. The Social Security Administration reviews the figures for working beneficiaries each year. If you are earning more, your benefits package will be recalculated to a higher rate, beginning in December the following year.
If you were born in 1937 and you took Social Security benefits before reaching full retirement age of 66 and kept working, the SSA withheld part of your payments each month because of your extra income. Now that you are beyond full retirement age, the SSA owes you the amount it withheld. For example, if you took retirement benefits early and later returned to work before age 66, the SSA would have withheld some or all of your payments during that time. Once you turned 66 and thereafter, your monthly benefits would be increased to make up for what you missed. Holding a job after age 66 will not affect these increased benefits.
Health Insurance Considerations
The SSA does not require beneficiaries to receive retirement benefits right away at age 66, but it encourages recipients to consider their health care needs. If you are employed and your employer offers health insurance, you might not need to sign up for Medicare until it is necessary. However, delaying retirement could affect your Medicare coverage, such as increased costs or lapses in coverage. You also might be able to extend your current work-provided coverage until after retirement if that's best for your situation. Medicare automatically covers employees who receive Social Security retirement benefits unless they choose delayed retirement, in which case Medicare covers only those who actively sign up for coverage.
- Socia Security: How Work Affects Your Benefits
- Social Security: Delayed Retirement: If You Were Born In 1937
- Social Security: Will You Receive Higher Monthly Benefits Later If Benefits Are Withheld Because of Work?
- Medicare.gov: Understanding Medicare Enrollment Periods
- Social Security: Are There Other Ways That Work Can Increase Your Benefits?
Stephanie Reid has been writing professionally since 2007, with work published in the Virginia Bar Association's "Family Law Quarterly" and the "Whittier Journal of Child and Family Advocacy." She received her Juris Doctor from Regent University and her Bachelor of Arts in French and child development from Florida State University. Reid is admitted to practice law in Delaware and Maryland.