Can I collect Social Security while I’m still working? Yes, you can. But it is not always advisable because a salary might reduce the benefit amount you can get until you reach full retirement age.
The Social Security Administration (SSA) will stop reducing your from the month you hit full retirement age, regardless of how much you earn.
This post will discuss how income and age affect Social Security benefits. Read on to learn more.
Retirement Age and Social Security
If you qualify for Social Security, you can begin receiving benefits from age 62 and continue working simultaneously. But before doing this, remember that you will incur double the penalty until you reach your full retirement age (FRA).
- You will consent to a reduced benefit by filing for Social Security early.
- Your benefits will temporarily be lowered if you earn above a certain amount.
The FRA in the United States is 66 years and four months (for those born from 1943 to 1956), and it goes up to 67 years for anyone born in 1960 and beyond.
You only qualify to receive 100% of your Social Security benefits per your income history after reaching FRA. But your payments would be cut if you start taking benefits before reaching FRA and earn more than the income limit.
As of 2022, the income limit is $21,240, and the SSA will deduct $1 in benefits for every $2 earned over this cap.
Once you reach FRA, you can keep working and collect benefits without any Social Security check deductions, regardless of your employment status or income level.
If you can delay taking your benefits for longer, you will also avoid penalties and increase your benefit amount by up to 8% annually until age 70.
After that, there is no longer any reason to wait because your benefit has reached maximum maturity.
Advantages of Collecting Social Security While Working
So, Can I collect Social Security while I’m still working? The short answer is yes.
Collecting Social Security benefits come with certain advantages. First, collecting Social Security payments might supplement your income if you have a lower-paying job, even with the deductions.
Besides, if you can still work at your FRA, you can collect your FRA benefits and salary, which can be helpful.
Disadvantages of Collecting Social Security While Working
If you are working and opt to collect Social Security benefits before reaching FRA, you will get a lower payout.
Additionally, if your income exceeds a specific limit, the SSA may defer a portion of your Social Security payment until you are 66 or 67, based on your birth year.
If you collect Social Security benefits and a salary, you may have to pay more taxes than you would if you drew a yearly wage.
Additionally, if you begin receiving Social Security payments before age 70, you lose the opportunity to raise your payout even further.
How Does Social Security Calculate Your Benefit?
Social Security payments are calculated based on averaging the earnings of your 35 highest-earning years. Therefore, if you’re at the top of your career, it’s advisable to keep working and postpone taking benefits until you’re 70. Afterward, you will qualify for your full benefit.
Conversely, you may go beyond the Social Security income cap if you continue working but start collecting benefits prematurely. If you are under your FRA in 2023, the SSA will deduct $1 of every $2 you make above $21,240.
It will deduct $1 for every $3 you make above $56,520 from the year you hit FRA to the month you reach FRA. You will then start to enjoy the full benefit.
Remember that any amount Social Security deducts from your benefit is not permanently lost. Social Security will revise your payout once you reach FRA to reflect the previously withdrawn benefits.
Can You Collect Social Security at 66 and Still Work Full Time?
Yes. You can work a full-time job at 66 and get Social Security benefits. But your benefits would be lowered if you have not reached your FRA at 66. However, you can still receive your full benefits while working if your FRA is 66.
Can You Collect a Pension While Working Full Time?
In most cases, you can receive a pension while still working full-time as long as your employer is not the issuer of the pension. You won’t have to wait for a certain period between taking your pension and starting a new job.
Summary
Can I collect Social Security while I’m still working? Yes, you can start receiving Social Security benefits while still working.
The only downside is that your payments will be reduced if you do so before reaching full retirement age.
In this situation, estimating your expected earnings and how much this would lower your benefit would be wise.
Once you figure out how much you’re going to get, you can determine whether having more cash now is preferable to the perks of delaying benefits until later.
At Legal Giant, we can connect you a highly experienced Social Security lawyer near you to help you calculate your projected earnings.
Contact us at 833-641-1650 for a free consultation.
