When you are planning for your retirement, you will likely be concerned about your income. Social security retirement benefits are often an important component of the income that you will enjoy in retirement. If you are worried that your social security benefits will not be sufficient for you, you are allowed to work while you are receiving your retirement benefits. However, your benefits may be reduced if you work. Elder Care Direction may help you to understand how working might impact your benefits and help you to plan for your retirement years.
Receiving your Social Security benefits
Your eligibility to begin receiving your Social Security retirement benefits is established by the federal government based on when you were born. When you are eligible to start receiving them, you can choose when they will start. If you choose to receive them early, your benefits may be smaller each month. You should consider the following things before you choose for your benefits to start:
- Your health
- Your cash needs
- If you plan to work while you are retired
- Other income sources for retirement
- Your anticipated future financial needs
- How much you might receive in Social Security benefits
The Social Security Administration allows you to work while you receive your retirement benefits. If you continue working after you have reached your full retirement age, you may be able to keep all of your benefits regardless of how much you earn from working. If you choose to begin receiving Social Security retirement benefits after you reach age 62, you will receive smaller amounts on each benefit check. If you work between age 62 and the time when you reach the full retirement age, your future benefit may increase because you will continue to make contributions.
How much money can you earn while you are receiving Social Security?
The amount that you are allowed to earn between age 62 and your full retirement age fluctuates each year. For example, people were allowed to earn up to $15,480 in 2014 without a reduction in their benefits. If you earn more than the maximum allowed amount, your benefits will be reduced. You can find the amount that they will be reduced by subtracting the maximum annual amount from your income and then dividing it by two. This will tell you how much your benefits will be reduced while you work and receive benefits from age 62 until you reach the full retirement age.
What is considered to be part of your earned income?
Your income includes all of the wages that you earn when you earn them. Bonuses and accumulated vacation or sick pay are also considered to be part of your income when you earn them. Other things such as government benefits, capital gains, annuities, pensions, interest, and investment earnings are not counted as part of your income.
Get help from Elder Care Direction
It is important to plan for your retirement. Elder Care Direction may be able to offer you guidance about when to start receiving your benefits and the potential impact that working might have on the amount that you receive. Call us today to schedule your free consultation.