It’s sad that retirees face obstacles from Social Security income limits. In our lifetime we all face obstacles. However, the way the economy is going, many people worry we may never see Social Security checks in our lifetime. We as a nation are told to prepare for the retirement phase of our lives and yet we may be penalized for having a hefty pension or continuing to work to supplement our income from Social Security. Putting so many limits on the income seems so unfair.
Many retirees choose to work to supplement their Social Security checks as they alone are not enough to live on. But should the person who continues to work to supplement their checks be penalized for it? Absolutely not, after working hard your whole life and preparing for retirement, you should not have penalties.
Necessities of working to cover the cost of everyday living should not be an obstacle that a retiree should face. A retiree still has to pay taxes on their properties and if they do not have a nest egg built up, where will that money come from? Retiring should not be a time to lose things you have worked hard for during your lifetime.
The fact remains, many people end up selling their homes and downsizing. It can be very emotional as well as very depressing. For others it may not be so overwhelming but a welcomed thought as they are tired of maintaining everything they did when they were younger.
You can continue to work and still receive benefits. However, the earnings will not affect your benefits during the month you reach your full retirement age. Full retirement age for people born between 1943-1954 is 66 and the age will increase to 67 for those people who are born in 1960 or later. Benefits can be reduced if earnings exceed certain limits for the months before reaching full retirement age.
Getting benefits before you reach full, retirement age has setbacks too. If you are younger than retirement age, you will lose $1 for every $2 you have in earnings that are above the annual limit.
The year you reach full retirement age, your benefits will be reduced $1 for every $3 that you earn over the limit of $37,680, for the year of 2011 until your actual month of full retirement age. Then you will get your full benefits, no matter what you earn.
The positive for those who continue to work is that any wages made after signing up, may increase your overall average, and your benefit may increase accordingly.
Life will always give us obstacles to overcome, but for the retiree having to face so many income limits when their income is already lower than they are use to, does not seem right. This should be a time in their life when they are enjoying their golden years. Hopefully Social Security will get it figured out before there is no money left at all.