How much can you Earn while Retired and Collecting Social Security

The questions: when to retire, when to sign up for Social Security and can they still earn wages while drawing Social Security, weigh heavily on the minds of many senior citizens. Some are worried that they will not be able to live on Social Security alone while others want to ease into retirement by working part time, yet don’t want to lose any benefits. Then, there are those who have lost their full time job and are trying to subsist on part time work and need the extra money that social security would provide.

The most important consideration in how much you will be allowed to earn, and still collect Social Security is your age. Those who wait until they reach full retirement age before collecting SSI benefits may keep all of their earnings. There is no limit on the amount of money they can earn and still collect full benefits. The age of full retirement is 66 for those born between January 2, 1943 and January 1, 1955. For those born after the first of January 1955 the full retirement age is 67.

Those who do not wish to wait, or who feel they can not wait, until they have reached the full retirement age for SSI may sign up and receive a smaller amount. They can still earn wages however for any money earned over $14,160 the government will withhold $1 for every $2 earned. This means if the recipient were to earn 15,160 then Social Security would withhold $500 of the $1000 earned over $14,160. This applies to those who will not have reached retirement age in the year they have began receiving payments.

For those receiving benefits during the year the will reach their full retirement age only $1 of every $3 dollars earned over the $14,160 will be withheld and then only until the recipient reaches full retirement age. In this case if one should earn at a rate of $15,160 per year the Social Security Administration would withhold 1/12 of $ 333.33 times how every many months until the recipient birth month.

A special first year rule exists for those who decide to draw their Social Security before they reach full retirement. Under this rule, any money they make in that calendar year before they retirement is not counted against them and will not reduce their benefits even if it is over the $14,160 limit.

A question that often comes up when considering social security benefits: what does the Social Security Administration consider to be income?  For the benefit of SSI benefits, income is only wages you earn from an employer or your net earnings if you are self-employed. Therefore government benefits, investment earnings, capital gains, annuities, pensions are not considered income.

Another question is at what point is income counted? For those working for wages their income begins to count as soon as it is earned even if it has not been received yet. Those who are self-employed have there income treated another way. The self-employed are expected to count their income only after they have received it and not when it was earned, except in a year after they have become eligible for Social Security and earned before they became eligible.

When deciding upon the optimum time to begin receiving Social Security, it is important to take into consideration that in the event that benefits are withheld due to earnings those monies will be repaid to you after you reach full retirement, by way of higher monthly benefits.

Although understanding your rights to Social Security Benefits can seem like a maze of confusing regulations it really isn’t as hard to understand as one might at first think. The Social Security Administration is always available to answer your questions either at their website or by phone. Specific questions can be answered by calling their toll-free number at 1-800-772-1213 between 7am and 7pm. 78Monday –Friday. For the deaf or hard of hearing the TTY number is 1-800-325-0778.