I am 63 years old and still working. I know that if I take Social Security early, my benefits will be reduced if I make more than $18,000. Is this money recoverable or is it lost forever?
It is not lost forever.
You can collect Social Security and work at the same time. But if you’re under your full retirement age (FRA), you could lose some of your benefit, depending on your earnings.
If you fall under your FRA all year in 2021, $1 will be deducted from your benefit for every $2 you earn above $18,960. If you reach FRA in 2021, $1 in benefits will be deducted for every $3 you earn above $50,520. The deductions stop the month you reach your FRA, regardless of how much you earn.
The government recalculates your benefit every year. To understand the recalculation formula, keep in mind that your benefit will always be reduced for each month you start using it earlier, regardless of whether you work or not. A simple example: If your payout at 66 were $1,400, but you take it at 65, you get $1,306. Start at 64 and you’ll only get $1,214.
Let’s say you take a $1,214 benefit on 64 and continue to work. Because of your earnings, you lose benefits until age 66. Let’s say over those two years, the total amount withheld adds up to 12 months of your $1,214 monthly benefit.
When your benefit is recalculated at 66, the government returns the 12-month forfeited benefit by recalculating your benefit as if you had started collecting Social Security 12 months later – at 65 instead of 64. Going forward, your monthly benefit will be $1,306.
it comes down to
If you work while receiving Social Security, your benefit may be temporarily reduced, depending on your income and your age.
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