The Impact of Working After Retirement on Your Social Security Benefits
How Working Affects Social Security
If you're earning income after claiming benefits, your wages may be subject to the retirement earnings test. This test sets income limits that determine any benefit withholding due to your earnings. The limits vary based on whether you have reached your full retirement age (FRA).
- If you will reach your FRA in 2024: $59,520 annual limit, $1 reduction for every $3 over the limit.
- If you won't reach your FRA in 2024: $22,320 annual limit, $1 reduction for every $2 over the limit.
Example Calculation:
For instance, if you're 65 with an FRA of 67 and earn $30,000 annually, your benefits could be reduced by $320 per month if you won't reach your FRA in 2024.
The Good News for Retired Workers
The income limits only apply to those under FRA. Once you reach FRA, your benefits will be recalculated to include previously withheld amounts, leading to larger payments. Planning ahead and estimating benefit reductions can help in deciding the best time to claim. Early claiming may still be beneficial in some situations, such as temporary income shortfalls.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.