How you can work and still receive benefits – Community News
Social Security

How you can work and still receive benefits

diego_cervo/Getty Images/iStockphoto

diego_cervo/Getty Images/iStockphoto

According to the Social Security Administration, you can receive retirement benefits and still work at the same time. The catch is that if you’re under full retirement age and earn more than certain amounts, your benefits will be reduced, but never really lost.


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This is how it works.

If you decide to work and receive retirement benefits, the benefit will be reduced now, but increased at full retirement age to account for benefits withheld from past earnings. The SSA notes that spouses and survivors who receive benefits because they have minor or disabled children in their care would not receive the increased benefit at full retirement age if benefits were withheld for work.

If you were born between January 2, 1959 and January 1, 1960, your full retirement age for pension insurance is 66 and 10 months. If you work and are of full retirement age or older, you can keep all of your benefits regardless of how much you earn.

If you are under full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you are under full retirement age throughout 2021, the SSA will deduct $1 from your benefit for every $2 you earn over $18,960.

If you reach full retirement age in 2021, until the month you reach full retirement age, the SSA will deduct $1 from your benefit for every $3 you earn above $50,520.

How income is counted

If you work for someone else, only your wages count towards the social security income limits. If you are self-employed, only your net income from self-employment is included.

For the income limit, the SSA does not count income such as other government benefits, investment income, pensions, annuities and capital gains.

An employee’s contribution to a pension or pension plan is included, but only if the contribution amount is included in the employee’s gross salary.

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If you work for wages, income is generally counted when it is earned, not when it is paid. If you earned income in one year, but the payment was made the following year, it is important to note that it should not be counted as income for the year you receive it.

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This article originally appeared on GOBankingRates.com: Social Security: How to Work and Still Receive Benefits