Social Security and Full Retirement Age: What To Consider Before Filing in 2023

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Just because you file for Social Security benefits doesn’t mean you have to stop working — or even should. Millions of beneficiaries work and collect Social Security benefits at the same time. The one thing to keep in mind is that your work income might reduce your monthly Social Security payment, depending on your age.

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The key things to pay attention to here are the Social Security Administration’s full retirement age and annual earnings limit.

The FRA is the age at which you can collect your full benefits without having your monthly payment reduced by your earnings. You can apply for Social Security as early as age 62, but applying before your FRA means your payment will be lower than it would be at full retirement age. The longer you wait, up until age 70, the higher your payment.

In 2023, people born in 1956 and 1957 will reach full retirement age, as GOBankingRates has previously reported. The FRA for those born in 1956 is 66 and four months, according to the SSA. For those born in 1957, the FRA is 66 and six months.

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The earnings limit is the amount of outside income you can earn each year without also having your monthly payment reduced. The earnings limit for 2023 is $21,240, up from $19,560 in 2022.

If you have not yet reached full retirement age, any work or outside income you earn above the limit will cause a reduction in Social Security benefits. Normally, for every $2 over the limit, the SSA will withhold $1 of benefits.

However, if 2023 is the year you reach FRA, the earnings limit is $56,520, up from $51,960 in 2022. For every $3 over that limit, Social Security will withhold $1 of your benefit. Once you’ve reached full retirement age, none of your work income will lead to a reduction in benefits.

As the SSA notes on its website, if your earnings will be over the limit for the year and you’ll receive retirement benefits for only part of the year, the agency has a special rule that pays a full benefit for any whole month it considers you retired — regardless of your yearly earnings.

This is an important rule to keep in mind if you plan to file for Social Security in 2023. Suppose you wait until September 2023 to apply. In this case, no matter how much you earn from January through August, it won’t impact your benefits for September, October, November and December.

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What’s more, any work income you earn after your FRA will not count toward the annual earnings limit. Once you hit full retirement age, you can earn as much as you like with no impact on the amount of your benefits.

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For more information, visit the SSA publication, “How Work Affects Your Benefits.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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