Working and Receiving Social Security Benefits: How to Make it Work

by | Apr 22, 2023 | Spousal IRA | 45 comments

Working and Receiving Social Security Benefits: How to Make it Work




Working While Receiving Social Security – The New rules

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Social Security benefits are a lifeline for millions of American seniors who are retired or disabled. However, many seniors are finding that they still have to work in order to make ends meet. Working while receiving Social Security is possible, but it can be tricky to navigate. Here are a few things to keep in mind:

– Social Security has income limits. If you are under full retirement age (which is 66 for those born between 1943 and 1954, and gradually increasing to age 67 for those born in 1960 or later), you will have your benefits reduced if you earn more than a certain amount. In 2021, that amount is $18,960. If you earn more than this amount, Social Security will deduct $1 from your benefits for every $2 you earn over the limit. In the year you reach full retirement age, your benefits will be reduced by $1 for every $3 you earn over a higher limit ($50,520 in 2021). Once you reach full retirement age, there is no limit to your earnings.
– Your benefits may be taxed. If you earn enough income from working and other sources (such as investment income), you may have to pay federal income tax on a portion of your Social Security benefits. There is a formula that determines how much of your benefits are taxable, based on your income. For most people, no more than 85% of their benefits are subject to tax. However, if you are married and file a joint tax return, and your combined income is more than $44,000, up to 85% of your benefits may be subject to tax.
– Working can affect your Medicare premiums. If you are enrolled in Medicare, your premiums are based on your income. If you earn more than a certain amount ($88,000 for individuals or $176,000 for married couples filing jointly), you will pay higher premiums for both Medicare Part B (which covers doctor visits and other outpatient services) and Medicare Part D (which covers prescription drugs). This is known as the Income-Related Monthly Adjustment Amount (IRMAA). IRMAA is based on the income you reported on your tax return from two years ago. For example, in 2021, your IRMAA will be based on your income from 2019.

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Despite these complications, working while receiving Social Security can be a good option for seniors who want or need to keep working. Not only does it provide extra income, but it can also keep you engaged and active. Here are a few tips for making it work:

– Be aware of the income limits and plan accordingly. If you know you will earn more than the limit, try to spread your income out over the year so you don’t have a single high-earning month that will trigger a benefit reduction. You may also want to consider reducing your work hours or finding a lower-paying job that doesn’t trigger the reduction.
– Consider the tax implications. If you think you may owe taxes on your benefits, make sure you set aside enough money to pay them. You may also want to consult with a tax professional to determine the best way to minimize your tax bill.
– Keep track of your earnings. You will need to report your earnings to Social Security each year so they can adjust your benefits accordingly. Make sure you keep accurate records of your earnings, including any self-employment income or tips.
– Don’t forget about Medicare. If you are working and enrolled in Medicare, make sure you understand how your work income will affect your premiums. You may want to consider delaying enrollment in Medicare Part B (which has a premium) if you have employer-based health insurance that is comparable.

Working while receiving Social Security can be a bit complicated, but with some careful planning and record-keeping, it is possible to do successfully. If you have questions or concerns about working and Social Security, consider reaching out to a financial advisor or Social Security representative for guidance.

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45 Comments

  1. RALPH FERREIRA JR.

    Every case is different…I did the math and I got to the conclusion that if I retired at 62 I will work only 4 days a week instead of 5, and with the 900.00 that I am getting from SSA I will end up making more money and work less…I don't think that I will never regret to retired at 62…

  2. Robert Bailey

    With all your tools you always talk about stiff penalties for working and collecting SS but no one ever tells people that at FRA your SS will be adjusted for months not paid… I took SS at 62 and on FRA my payments were adjusted as if I retired at age 64 … Never heard one financial planner tell anyone that …

  3. terry debord

    The real question is when will I die, retire late and die a year later what good will all that money do for you in a box under the ground.

  4. gregg darbygregg

    You said the rules are different for disability SS?? I've been on disability SS for 9 years and will be full SS retirement age in 8 months, can I still make unlimited wages then after this winter and not be penalized? What happens to the Medicare benefits if you go back to work and have a great medical benefit plan? Do you cancel Medicare or can you at all do that? Kind of confusing here sir!

  5. Boathemian

    62 and working two days a week. It’s awesome. It’s as good as it’s going to be for me

  6. Sweety Patnett

    Many people work hard and don't live to collect ss benefits for a long time, let alone receive it at all. Lots of people died and never live to collect ss benefits. Smh. I collected mine early and have no regrets. life is not promising to anyone of us. Just saying. Thanks for sharing this video, it was very informative.

  7. Sweety Patnett

    Thanks for sharing this video. It was very informative and helpful.

  8. Kay Dearborn

    I'll be taking mine at 62, I'll be 61 this year. Born in September of 1962! That's if I make it to 62.

  9. God’s World

    Okay, if I collect SS at 1,600 at 62 (you’re saying I can still) work and not make more than 21,240 with no penalty.
    Is that (before or after tax) as a single benefit. ?

  10. Brenda Forster

    Disability 3rd party payor not condidered income if on SSD?

  11. Kenneth Hill

    Everyone says that there are no penalties if you wait untill full retirement age but what they don't tell you is that most likely the two incomes will put you into a higher tax bracket ,which like in my case caused me to pay the IRS rather than have the IRS refund me my over payment. Which can be tuff to take when the ss benefits don't come close to paying your bills,which is why I am in favor of incomes under $100,000 per year should not be taxed at all !!!! I think that would get the economy running again.

  12. AlphaCannibal

    My wife works and makes about $110k I am 65 and don't work or have other income. I haven't filed for Soc sec yet cuz I thought it would be taxed. Did I understand that I am wrong? Can I file for my soc sec and not pay Fed tax on it as long as I personally don't have other income?

  13. Al Jensen

    I turn 66 and 6 months in May 2024. If I were to draw at 65 and 10 months in 2023. Would my earnings limit for 2023 be the annual total of21,140 or would it be calculated on a monthly basis, 21140/ 12.

  14. Dorian Jacobs

    I'd be retiring or working less in 5 years, and I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around
    $250K per year but nothing to show for it yet.

  15. Ernesto Aranda

    Forgive me if this sounds like a silly question. The $21,240 limit is gross, correct? What if I choose to retire early at 62 and move overseas where my reduced payment is enough to live on. If I choose to work and make the limit, am I allowed to deposit all of my earnings beyond the limit into a Roth or IRA or something else, will that amount be counted? For example if my monthly gross is $3,000 per month and the earnings limit is $1,770 per month, can I deposit the remaining $1,230 of my salary without penalty?

  16. Kurt Boogertman

    This video is great and very informative. I don't have the income I used to have because of job situations. My wife is on disability and I'm 61. right now because of a lot of unfortunate debt my out going is greater than my incoming. I have an IRA which almost depleted. I may be forced to start collecting . I may try to switch to working part-time which I'll probably do for ever while I build a side gig income doing woodworking and furniture refinishing. Is there any advice you can offer. Thanks.

  17. Robin Byrd

    Does the 21240 include the ss ? Or is it just what you earn by working ? Pretty sure that’s what you said lol

  18. Kevin J

    Great Information! Thank you!

  19. Suzanne Hudson

    I appreciate the clear explanations given here. Lane Martinsen is not in a hurry. His patient way of speaking helps me follow along. The graphs are professionally done. Youtube lets you pause the graphs. After a moment, you get an unobstructed view of them.

    Some other financial planners talk as if they are in a hurry to get onto the next subject. I find myself not fully understanding what they just said, and already they are talking about something else.

  20. Neal F Williams

    I am 63 now and if a retire soon i will have $1,600 in Social security, my military retirement is just over $1,200, and 10% of that is tax free through the VA. None of this counts toward earned incom limits right?

  21. Robert Dunphy

    We all need to save social security now not later and we need to take thoses in office out of office in government that don't want to save social security.

  22. Matrix LLC.

    All of answers of analysis ars self serving. He acts as if he has all the right answers.

  23. Yung Kim

    Sir,I have a question about retirement . When I was sick, I had liver transplant, and that time, I received Social Security Disability benefit, and now I am back to full-time job. Also, I am 59.5 years old, and I don't know if I can get this Disability benefits while I'm working full-time? If you have any idea, please let me know.thanks

  24. Edward Orem

    Thinking about or those of us living abroad, how will cbdc affect our use of digital dollars interface in milieu of different currency? What if we're in a BRICS country??

  25. Julie Henderson

    Government made a contract with me, as a worker, contributing to an investment. It must be made "illegal" as breach of contract, to change policy before the contract expiration. (Retirement Age)

  26. Julie Henderson

    Why are SSDI recipients not required to meet same standards as SS?

  27. Julie Henderson

    Does Government use investors funds and compounded interest during your lifetime? If so, why?

  28. Julie Henderson

    What happens to funds when investor dies?

  29. Julie Henderson

    Is social security basis 10 or 35 years? Huge difference in monthly benefit!

  30. Julie Henderson

    Government takes your money betting you will die and not receive it!

  31. Julie Henderson

    Social Security is the biggest Ponzi Scheme! Why penalize or limit "investors" for working? Why penalize "investors" for not taking MRD???

  32. Joyce Jochim

    I have been divorced for over 29 years and have not remarried. I will turn 65 Nov. 2023 but my full retirement age will be age 66 and 8 months since based on the year I was born. I will continue to work FT for the next few years. Question. I was married 10 yrs. prior to divorce. Can I collect my portion of my ex-husband's social security now or do I have to wait until my full retirement age of 66 and 8 months? Also, if he retires first does that reduce what I will get even though he is my ex?

  33. Jj Johnson

    I turned 66 this JANUARY, and want to know if I can open an olinestore?

  34. Marie Medeiros

    One more fact
    Gov employees who receive a pension, either receive very very little SS benefits or mone at all although they contributed to it. Called the Winfall Eliminatio Act

  35. arolyn Redding

    ❤tthank yo credit viral your aweome

  36. Alex Close sr

    SS just got a raise in january 8.7 percent, how is it possible to get another raise.

  37. Delfina Ceballos

    A person is retired FRA and if the persons win lottery (couple of thousand in lottery ) does it affect The monthly payments of the SS.???

  38. Rick Willer

    Impressive presentation that led to my taking the SS report offer and then the retirement course. My foundational understanding was better than I thought, and with pensons (taxable) and SS secondary, benifits of medical expenses in my retiremnet plan, etc. provided yet more opportunity with Lane , once I achieve accredited inventor status in a few years. I think Lane has information to assist you in preparing for the best retirement that you are willing to work toward. Thank you Lane!

  39. Ron Moscoso

    What about passive income, real estate rental income? Penalty or not?

  40. Dusty Rodes

    I don’t understand why there is a penalty it seems ridiculous. You are still paying taxes Uncle Sam is still taking a bite of your ass what’s the big deal

  41. Gary Sell

    Sad thing is government takes ssi on every payroll for work history but when you die you can't pass it on to family.Its my damn money!

  42. Carole Walker

    I donate plasma and am paid $100 per time. We are now taxed on any yearly amount over $600.

  43. prandn sbg

    Lane thank you for sharing this information. Question: If I take SS at 67 ( FRA ) & continue working, does that affect benefit amount for years 68, 69 & 70?

  44. Leroy Lester Anderson

    Government employees are not supposed to be collecting Social Security or state officials that work for the state

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