As the name would imply, Social Security retirement benefits were meant to be paid out to beneficiaries after they stop working.
You can continue to work as long as you want, and you can still collect Social Security benefits. However, you should be aware that continuing to work after claiming Social Security benefits could reduce the amount that you receive, particularly if you have not yet reached full retirement age.
Working Before Full Retirement Age
From the perspective of the Social Security Administration, full retirement age for those born in 1960 or later is 67. If you continue to draw income before you reach full retirement age, the SSA considers you a worker rather than a retiree. As such, some of your benefits may be held back.
Specifically, for every $2 you earn above a certain limit, the SSA will withhold $1 of your earnings. For 2022, the earnings limit is $19,560. Thus, if you are under full retirement age and you earn $39,560 in 2022, your Social Security benefits will be reduced by $10,000.
As to how many hours you can work and still collect Social Security, this will obviously depend on your hourly wage. For example, if you earn $20 per hour, you can work 978 hours per year before your Social Security benefits are reduced, assuming you haven’t yet reached full retirement age. At 40 hours per work week, that means you can work just over 24 weeks before hitting the earnings limit. If your salary is higher, that number obviously will be adjusted downward.
Working the Year You Reach Full Retirement Age
Things change the year you reach full retirement age. At this point, the amount you can earn before any benefits get withheld is $51,960, as of 2022. Further, benefits are reduced by just $1 for every $3 you earn above the earnings limit. For example, if you’re earning $50,000 the year you reach full retirement age, you won’t see any reduction in your benefits at all. But if you earn $60,960, your annual benefit will be reduced by $3,000. Note that this reduction ends in the month that you reach full retirement age.
Working After Full Retirement Age
For some people, working after full retirement age is not the definition of “retirement.” But for others, working after age 67 can be a joy — or a requirement.
Regardless of the reasons you might have, the good news is that once you reach full retirement age, you’ll no longer suffer any penalties for working. You’ll be entitled to your full monthly Social Security benefit regardless of how many hours you work. Even if you decide to work full time or run a business, you’ll get to keep your earnings and all of your Social Security payments.
You’ll Always Be Made Whole
Losing Social Security benefits because you might have to work can be a tough choice to make. But the good news is that ultimately it’s not an either-or proposition. If you lose Social Security benefits because you are working, they are never actually “lost.” Rather, they are simply suspended. The SSA will always make you whole for any suspended benefits.
Once you reach full retirement age, the Social Security Administration will recalculate your monthly payout and increase your payments to make up for your deferred benefits.
What Is Considered Income?
There is one final way you can still “work” and collect all of your Social Security at the time you expect it, rather than as deferred payments. Essentially, if all of your income is passive, you can earn as much as you’d like and it won’t have any ramifications on your Social Security earnings. Specifically, the SSA counts only wages or salary from a job, or the net profit from self-employment, as earnings. Investment income, pensions, veterans benefits, annuities, interest and government or military benefits are not counted.
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