Many individuals choose to continue working after they begin collecting Social Security benefits, but many might not know whether this will have any impact on their current or future benefits. While we, the disability advocates at Disability Associates, focus on Social Security Disability Income or Supplemental Security Income, we know that Social Security benefits are a pressing issue for millions of Americans approaching or at retirement age, and we are happy to discuss what you should know about working while collecting Social Security.

How are Early Benefits Impacted by Earned Income?

Some individuals may choose to collect early retirement benefits before they have reached their full retirement age. In this instance, claimants may see a reduction in their benefits if they choose to work while collecting Social Security retirement benefits. In 2019, a claimant can make up to $17,640 in earned income and not see any reductions in their benefits. Claimants who make more than this, however, will see a reduction in benefits at a rate of one dollar for every two dollars in income they make over the limit.

How are Full Retirement Benefits Impacted by Earned Income?

In the year that you will reach full retirement age, the reduction to your benefits will change. If you will reach full retirement age in 2019, you are eligible to earn $46,920 in income before deductions in benefits will apply. Above this amount, the benefit reduction will apply at a rate of one dollar for every three dollars earned. It is important to note, however, that the Social Security Administration (SSA) will only count earned income previous to the month you reach full retirement age and will not look at the earned income you expect to receive for the full year. Once you reach full retirement age, the amount you make in earned income will no longer have a negative impact on the benefits you receive.

How Does the Social Security Administration Reduce Benefits?

Unfortunately, Social Security benefits are not proportionately reduced on a monthly basis, and instead, Social Security benefits are typically withheld completely until the applicable benefit reductions are met. It is important to take this into consideration when making the decision to work while receiving Social Security benefits.

Will I Be Able to Gain Back the Reduction in Benefits from Earned Income?

Fortunately, reductions to benefits when earning an income over the stated threshold is not lost to the claimant forever. Once you have reached full retirement age, the SSA will recalculate your benefits to make up for the period of time when your benefits were reduced, and your benefits will be incrementally increased each year until they are completely recouped.

Are There Other Ways My Benefits Can Increase by Working?

Social Security benefits are determined by the 35 years in which you worked the most. If you continue to work past full retirement age, these years will also count toward this amount. As such, if you earn more in the years you work after full retirement than you earned previously, these years can help to boost your Social Security benefits for the following year. This recalculation of your benefits happens automatically, and you will see an increase in December of the following year.

Will I Need an Attorney to File for Social Security Benefits?

There is typically no need to retain an attorney when applying for Social Security retirement benefits, but this is not the case for Social Security Disability Income (SSDI) or Supplemental Security Income (SSI). If you are disabled and applying for these benefits, the Social Security Administration (SSA) has stated that individuals who have an attorney advocate on their behalf may hold a better chance of a successful result. The disability advocates at Disability Associates encourage you to contact us to learn more about how we can help!