What Happens to Your Social Security If You Work Past 70?
Written by
Chris Adam
Edited by
Jenna Klaverweiden
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Just because you reach age 65 doesn’t mean you’re ready to stop working. Beyond financial needs, the Centers for Disease Control and Prevention noted that work provides social interaction and an improved quality of life for many older adults. Those may be some of the reasons labor force participation rates for older workers are expected to increase through 2030.
But if you’re approaching age 70 and wondering what happens to your Social Security if you continue working, read on to see some things to consider that may impact your finances.
Now Is the Time To Claim
Let’s start with this clear guidance from the Social Security Administration: If you’re 70 or older, you should apply now for your benefits. The reason is simple — waiting beyond 70 won’t increase your benefits.
“Most people assume working longer always means bigger Social Security checks,” said Andrew Lokenauth, founder of Fluent in Finance. “Here’s where they get it wrong. The delayed retirement credits that boost your benefit by about 8% per year stop at 70. So if you’re past 70 and haven’t claimed yet, file now, because waiting costs you money every single month.”
Work May Increase Your Benefits
Just to be clear, you can receive benefits even if you still work. Here’s even better news: Your earnings can lead to an increase in your monthly benefit (even after you start receiving benefits).
“Your monthly benefit may increase if your new earnings are higher than one of your previous top 35 highest-earning years,” said Marguerita Cheng, CFP, CEO of Blue Ocean Global Wealth. “In other words, your Social Security benefit can increase.”
Keep Taxes in Mind
As with many areas of personal finance, experts told GOBankingRates that senior workers need to keep taxes in mind when thinking about how they may work past 70.
“Extra income could still affect how much your Social Security is taxed,” said Brandon Gregg, CFP, advisor with BBK Wealth Management. “Up to 85% of your Social Security can be taxed depending on how far your income goes up.”
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