RetirementJobs.com Staff Writers
You can have your cake and eat it too when it comes to working in a retirement. In years past, Social Security laws discouraged older workers from staying on the job. But that’s no longer the case.
Nowadays, Uncle Sam Wants You… To Keep Working
Legislation passed in 2000 recognizes the value of older workers and actually provides incentives for baby boomers and seniors to remain in the workforce or take retirement jobs.
Those laws eliminated the earnings limits for anyone that has reached Social Security’s full retirement age (FRA), which currently ranges from age 65 to 67. Only those under full retirement age and already receiving Social Security Retirement Benefits are affected by the following (2010 thru 2011) limits:
|For People WHO ARE NOT Receiving Social Security Benefits:|
|If you’re…||You can earn up to this amount with no penalty:||If your retirement job pays more than that amount:|
|Any age||No limit||There is no impact on your benefits either now or in the future.|
|For People WHO ARE Receiving Social Security Benefits:|
|If you’re…||You can earn up to this amount with no penalty:||If your retirement job pays you more than that amount:|
|Under full retirement age (62-65)||$14,160||Your benefits are reduced by $1 for every $2 earned over the limit. For example, if your retirement job pays $15,000 a year and your Social Security payout is $12,000 a year, that payout would fall by $720 (about 6%) to $11,280.|
|Reaching full retirement age this year (65-67)||$37,680||Your benefits are reduced by $1 for every $3 earned over the limit. For example, if you earn $40,000 a year and your Social Security payout is $13,000 a year, that payout would fall by $1,293 (about 10%) to $11,707.|
|Over full retirement age
||No limit||No impact|
What's Your Full Retirement Age?
Social Security establishes the age at which workers and their families may begin receiving retirement benefits. If you were born before 1938, this is set at age 65. If you were born between 1938 and 1954, the full retirement age increases progressively from 65 up to 66. If your birth year is 1955 or later, your full retirement age increases progressively up to 67. Age 67 is currently the oldest full retirement age though this could increase in the future.
When Should You Begin Drawing Social Security?
You may begin taking Social Security retirement benefits at age 62. But keep in mind, if you begin before reaching your full retirement age (FRA), the monthly benefits are paid at a permanently reduced amount (up to 20 to 25% less) to reflect receiving benefits for more years. Consider these scenarios: