Claiming SS and continuing to work

[GinBoy2]

Just curious if anyone has any insight into this.

 

So I'm fast approaching retirement age and claiming SS.

 

My full retirement age would be 66 & 10 months, but I'm thinking of taking it at 64.

 

But, I also enjoy working. I tried doing nothing and I was bored to tears after a few years.

 

So the SS website explains very well that if I work before 66/10 how much would be deducted from any SS check, then goes on to say;

 

Will you receive higher monthly benefits later if benefits are withheld because of work? Yes. If some of your retirement benefits are withheld because of your earnings, your monthly benefit will increase starting at your full retirement age to take into account those months in which benefits were withheld.

 

Curious if anyone has any real experience of this, and what it did to your payout after you reach full retirement

 

 

 

[Etaoin Shrdlu]

I looked into this a few years ago when I retired.

 

If you work is outside the US before full retirement age and the work is not covered by Social Security, it isn't a matter of how much gets deducted from the monthly check but instead whether a check gets issued or not. Such earnings are subject to the "foreign work test" and if one works, or is available for work, for more than 45 hours a month SS will suspend the check altogether.  It is an on-and-off switch instead of the phase-out formula used in the US. Apologies if you knew this, but I was not sure.

 

Social Security is supposed to be neutral in terms of total benefits over one's life expectancy, so for any months that the benefits are suspended under the foreign work test, the benefits, when they re-start, would be for a higher amount so that the expected benefit remains the same.

[gk10012001]

On 7/2/2021 at 7:58 AM, Etaoin Shrdlu said:

I looked into this a few years ago when I retired.

 

If you work is outside the US before full retirement age and the work is not covered by Social Security, it isn't a matter of how much gets deducted from the monthly check but instead whether a check gets issued or not. Such earnings are subject to the "foreign work test" and if one works, or is available for work, for more than 45 hours a month SS will suspend the check altogether.  It is an on-and-off switch instead of the phase-out formula used in the US. Apologies if you knew this, but I was not sure.

 

Social Security is supposed to be neutral in terms of total benefits over one's life expectancy, so for any months that the benefits are suspended under the foreign work test, the benefits, when they re-start, would be for a higher amount so that the expected benefit remains the same.

Basically what you wrote is correct.  I am 64 and in the exact time frame as the OP.    I would add that for those that are working and intending to get SS benefits, I point out that SS income is taxable, and most likely 85% of your SS benefits would be counted as income since the working OP by definition will have other income that no doubt gets above the minimum SS (non taxable limit).  This of course will increase your income tax for the Feds, and any state you live in that counts social security income.  Is it worth it to take SS while working?  Run the numbers on an excel spreadsheet for 1 year 2 years and 5 years.  It is easy to do.  Then figure your taxes, and see if you are content with you job income combined with your SS income are both being taxed at a higher rate.  Presumably, when you retire and NOT working, your SS income along with whatever retirement monies you use or withdraw or somehow receive, will be taxed at a lower rate.