Does Claiming Social Security Mean You Have to Stop Working?

Most people claim Social Security retirement checks when they’re ready to leave the workforce and live off their earned benefits. But, just because these benefits are called retirement benefits doesn’t necessarily mean you must stop working in order to claim them.

However, you should know that working could affect the income you get from Social Security, depending on how old you are. Here are the key rules related to earning money from a job while getting retirement benefits at the same time.

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You can work as much as you want after you’ve reached your full retirement age

The good news is, if you have reached your full retirement age (FRA), you can work as much as you want, and earn as much as you want, without your Social Security benefits being impacted at all. Full retirement age is designated by the Social Security Administration, and it depends on the year when you were born. The table below shows when you’ll reach your FRA.

Birth Year

Full Retirement Age

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 and later

67

Data source: Social Security Administration.

If you’ve already hit this milestone age, no matter how much you earn, you will not forfeit any of your Social Security benefits because of your paychecks. You could, however, find that more of your Social Security benefits are subject to tax once you reach a certain income threshold.

Working before full retirement age could mean temporarily forfeiting some benefits

Now, if you haven’t reached your full retirement age yet, the rules get a little more complicated with regards to whether you can work while collecting benefits. See, you can work, but if you earn too much, you could find yourself temporarily losing some Social Security checks.

The amount you can earn before your paychecks become a problem will depend if you’re going to hit FRA at some time during the year or not. That’s because different income thresholds apply before you begin to lose benefits, and you lose benefits at a higher rate if you’re younger.

This is how the rules work:

If you’ll hit FRA at some point during the year, you can earn up to $50,520 in 2021 or $51,960 in 2022 and won’t lose any benefits. You’ll lose $1 in benefits for each $3 extra you earn.
If you won’t hit FRA during the year, you can earn up to $18,960 in 2021 and $19,560 in 2022 before you begin losing benefits. You lose $1 in benefits for each extra $2 earned.

The Social Security Administration actually withholds entire checks when you forfeit benefits, so you don’t just lose a little from each month’s payment. If you end up forfeiting $3,000 in Social Security due to excess earnings and your checks are $1,500 per month, you’d miss out on two entire months of benefits.

Now, when you reach FRA, the Social Security Administration looks at how many checks you missed and credits you back the early filing penalties that would’ve applied in those months. As a result, your monthly checks go up at FRA. But since you may not get your benefits back for a while, you still need to be aware that working could have a big impact on the income Social Security can provide you.

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