Social Security Income Limit -
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Under Age 65
If you are under age 65 - the maximum earnings limit is $12,900 if you are working and collecting your Social Security payments. If you earn over $12,900, you lose $1 for every $2 you earn, after you hit the max.
That sounds bad and you do lose half of the SS payment over the earnings limit BUT you still get full Social Security for $ -0- to $12,900 in wages, and half of your Social Security for the rest of the year. Right?
It will really help you, long term, if you don't take it early, when you are still working. If you wait, you get the higher Social Security payment which will last you for the rest of your life. However, for some folks, paying off some of your debt may help greatly as you have less payments in retirement, when you have less income, and the the peace of mind itself may be well worth it.
Over Age 66
(Born 1/1/43 - 1/1/55)
Over age 66 - there is no earnings limit. It used to be age 70... but was reduced to your "full retirement age" so that folks CAN continue to work and draw Social Security also. You can wait longer to get to your "full retirement age" and full benefit payment -- but you can also consider drawing a Social Security benefit at age 66 - whether retired or still working.
You can continue to work and live on your working wages -- and save the Social Security payments for later, when you aren't working and need some extra cash. For example, at $800/month Social Security -- you'd have $9,600 in your savings account in a year (actually, you likely won't have quite that amount because of taxes, but still a nice amount to add to savings in just ONE year!)
One gal I spoke to has travelled the world, having the time of her life, with her Social Security monies, and she lives on her working wages.... what fun! Her home is paid off, so she is having FUN at 70+ and has been doing this for years. She isn't ready to retire, she loves her job, and using her vacation time, she travels anywhere she can get a good deal -- all on her Social Security savings account!
Year you become Age 66
In the year you hit age 66, there is a Special Rule that works like this (this might be MORE than you need to know.. just telling you in case you care...)
If your earnings for the months BEFORE you turn 66, exceed $34,440 -- you will lose $1 for every $3 you earned during those months. The months after age 66, have no earnings limit.
First Year of Social Security Benefits
You can actually earn more than the annual limit of $34,440 that first year. If you make under $1,080 per month (under age 66) or $2870 (over age 66), in the year you retire, you will get your full Social Security payments even if you exceed the annual limit, as long as you stay under the monthly amount -- yes, it is confusing! (this if not for those who are self-employed.. )
Maximum Earnings
If you think you'll earn more than the max in any year, you should contact ss to advise them on your estimated earnings. After April 15 of each year, Social Security will compute any reductions based on earnings. If they paid you too much because your earnings estimate was too low, you will repay the amounts you were overpaid. If they paid you too little, as you underestimated your earnings, Social Security will pay you the SS monies due to you.
