This video discusses the Social Security Annual Earned Income Limit and working while collecting Social Security. The video discusses first year exceptions to the earnings limit, often called the Monthly Earnings Rule, or the “Grace Year” exemption, how this exemption is applied if you earn more than the monthly limit in any given month and what happens to spousal and child benefits if your benefits are suspended due to excess earnings. The video ends with a discussion on what constitutes earnings in the eyes of the SSA.
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As the population continues to age and life expectancies increase, more and more people are choosing to work even after they become eligible to collect Social Security. For many individuals, this can be a great way to supplement their retirement income, stay active and engaged, and enjoy the sense of purpose that comes with work.
If you are considering working while collecting Social Security benefits in 2023, there are a few things you should keep in mind. First, it is important to understand how your earnings will affect your benefits. For example, if you are younger than full retirement age (which is currently 66 or 67, depending on your birth year), your benefits may be reduced if you earn more than a certain amount each year. In 2023, the earnings limit for individuals younger than full retirement age is expected to be around $18,960.
It is also important to note that if you do work while collecting Social Security, you may be subject to income tax on some or all of your benefits. The amount of tax you owe will depend on your income level and other factors, so it is wise to consult with a tax professional to understand your specific situation.
One potential benefit of working while collecting Social Security is that it can help you delay taking your benefits until a later age, when you may be eligible for a higher monthly payment. For example, if you delay taking your benefits until age 70, you could receive up to 8% more each year than if you had started collecting at your full retirement age.
Another thing to consider when working while collecting Social Security is how your employment may impact your health care coverage. Depending on your job and your employer, you may be eligible for health insurance through your workplace, or you may need to obtain coverage through other sources. Be sure to research your options carefully to ensure that you have the coverage you need.
Ultimately, the decision to work while collecting Social Security is a personal one that will depend on your individual circumstances and preferences. If you are considering this option, be sure to do your research, consult with a financial advisor or other professionals as needed, and carefully evaluate how it will impact your finances and overall well-being. With the right planning and preparation, working while collecting Social Security can be a great way to enjoy a fulfilling and financially secure retirement.
Good job, thank you.
Thank you for explaining what happens to the reduction in benefits..
Hi, I have a question: the month that I reach full retirement age, which in my case is February 2023, can I earn any amount of money from March 2023 on and not be subject to the earnings limit test?
I would greatly appreciate an answer. Thank you.
My age was 62 I am start collacting ss benifit collecting . now my age 65 can I work ?
Probably stupid question. IF i Make $28,000 at my W2 job but lose $3,000 in my self employed job due to tax write offs like gas and rent and other things. Does Social security see my income as $25,000?? 64 yrs old
do you know of a calculator that you can enter the numbers and it will show how much you would get on a month-by-month basis if you wait to get SS after your FRA
Can some one help me on this please.
My FRA would be this year( 2023) in JULY but I will begin receiving my SS in March of this year (four months early of FRA). I also want to continue working until Sept. of this year. By the end of Sept I will have made 50,000. Will I have to pay any penalties?
Please explain the dates for the full retirement year. I plan on retiring December 31, 2023. My FRA is January 1, 2025. So can I work and receive Social Security The year of 2024 at what earnings cap?
My husband has ihss. I am his caregiver. Is that icare money counted as income?. Because I live with him, I amn not required to pay tax
what is considered "income" in this scenario? w-2 only?
I must be obtuse. So, if I work past FRA and commence taking benefits after FRA, is there any limitation on how much I can earn without paying anything back to SSA?
Please need some help on this. My FRA would be this year( 2023) in JULY but I want to receive my SS in March of this year (four months early of FRA). I also want to continue working until Sept. of this year. So do I fall under the 21,000 or 56,000. If I'm understanding it correctly this is the year I reach FRA so it would be 56,00.
Earnings from employment. Gross or net? I'm allowed about $1700 a month wages. Is that before or after federal and state deductions? Thanks!
Is the $1770 limit based on net or gross income?
You are WRONG for being born in 1957 it is 66 years and 6 months NOT 66 years and 4 months.
Thank you
What is the earnings figure the SS admin uses from our W2? Is it Gross, after taxes, adjusted gross income?
Question, if we both retire, is that collecting Social Security prior to our age of 66.10 then one of us decides to work out a job, does a penalty, acrew after adding both of our benefits together or just the working persons amount? If my wife ops to get half of my Social Security payment because it is higher than hers and I continue to work does that stop her from collecting a higher amount? If I get the penalty and they withhold some of my Social Security benefit, I understand that at the Time I have an eligible for full retirement that they have a formula that will change my amount. Would that also affect the amount to get my spouse would collect. With that increase?
I'm not expected to make much income since I'm just starting the business? i forgot to include this question? Thanks again
what happens when you start collecting and work until you reach the limit of 21,240 but you have a side business that you are running. How is the income from the side business that you are still doing figured in? Thanks for your reply.
What if you win the lottery? Is that considered unearned income and won't affect your monthly payments?
Great information in your videos!
Does passive income, such as income from rental units held in a trust, count towards your Annual Earned Income? Thanks
Question: I was born in Oct 58. My FRA is 8 months after my 66th Bday in 2024, or June 2025. I make roughly 120K. My plan is to begin collecting in January of 2025. I would earn roughly 60K by mid year. After that, there is no limit. I want to keep working the remainder of that year. From all I've heard, I should be able to keep all my benefits of that year, even tho I would make 120K. Is that true?
Hi Jeff, i went through this video a few times and I dont think im understanding: Im retiring at age 62 this (2023). My gross wages will be $4,0000/mo from January through 30 June., ie, earnings of 26,0000 for all of 2023 thereby exceeding my income limit by 4,760 ( for which i would expect a SS reduction of 50% or $2,380. Thats makes sense.’
However, i also plan to get my 1st $2,125 SS in march and every month thereafter.’
But march, april, may & june wages will be $4,000 / mo abd then zero for july -dec
The video seems to imply that since i exceed the $1,770 test i would lose my entire social security chk of $2125 (loss of 2125 x 4 = 8500[ march-june] even though im only exceeding my annual earnings limit by $4,760 and of which i would really ‘owe’ 50% or $2,380…
Have i lost $8500 in 2023 or $2,380 ??
Im fine with the annual earnings limit but am i not understanding something here ??
Thank you
Heres my question: 1.) i turned 62 in jan 2023. I will receive my 1st SS payment in march of Wowe and each month (march-Dec 2023h and 2.) I will have earning frommy employment from jan 2023 throughJune 2023 totalling $26,000 and I will have no additional employment earning fromjuly- december 2023.
1.) Will i have any of my social security from 2023 tKen away ? 2.) if so, how much? And 3.) when and how will that money be taken back.
In 2024 and beyond i will limit my wage earnings tp the annual earning limit. im concerned about .this (2023) transition year.
Thank you
I remain a bit confused about the "Grace Year" issue. I am currently 65, birthday in July, and will reach full retirement age in December of 2023. Is this my "grace year" and can I begin collecting now, or would I have to wait until my 66th birthday in July to begin collecting? Further, I am equally confused about spousal benefit, i.e., the added benefit that my wife could collect based on my benefit number. Will she increase her benefit based on my own, or how exactly does that work? Thank you SO much for a great channel!
So if I am age(62) and begin taking Social Security in July of this year, the 1st year rule is only applied through December , and the following year(s), it goes by the annual earnings limit correct?
Great videos that you produce, thank you. I am considering taking SS now, just turned 65. I am self employed as a Realtor, with that business set up as an LLC. I pay myself using a payroll service. My question is, can I take $20,000 in payroll and collect social security, and any additional income stays in the LLC account to be used for business expenses. Will I be penalized if my LLC makes more than the allowed income for 2023?
Someone else asked the same question below. If you go over the limit and they apply the $1 for every $2 earned rule. Let's say you owe back $5K. Is that money they withhold the following year is a totally lost SS income? I thought you would get that money back after the full retirement age. Thanks,
Do Roth conversions count as earnings if benefits begin in a non-fra year?
I received ssi, but can not work no more , copd ,I am on a oxygen tank now,will I still receive ssi?
My and my spouse social security benefit started March 2022 at 64 as I was planning to retire soon. latter I changed my mind to retire because of the stock market and reported my income (60K) to SSA in August 2022. Since that my and my spouse social security benefit is suspended. We got 1099 from SSA. SSA website says “You do not currently have any over payment. Also, it says your benefit are suspended because you are working.
My question is what about the money I received from SSA. Do I need to return it? Thank you
I'm a 60 y/o self-employed widow. One SSA doc says I have the Annual Earnings Test ($21k), and another says my survivor benefits are treated as though I'm FRA (no limit on income). Which is it? Also, how does SS know how many hours I work at my business (15-45 or more)? Are hours just self-reported? If I work >45 hrs in a single month, I have to pay that full month back?
For a person that is 67 years old and wants to collect SS and work at the same time, possibly until 70 and a half, what is the figures that would pertain to me???.
My big question!
I filed for social security at 62 & 9 months. I am presently 64 & 7 months old. However, I continue to work and earn approximately $25,000 per year. Social security takes back some money because I earn over the yearly $21,240 limit.
My question:
At some point doesn't my yearly earnings that I'm getting from work while I'm collecting social security get factored into what I collect from social security and could raise my amount that I'm collecting now?
Yeah, you date for 1957 is only correct for those that were born January 1st. 1957. The rule states if you are, you can use the last day of 1956 Which would make April 1st of 2023 as the FRA.
Now, let's go with that date. My interpretation of the rule is that a retiree can earn up to 56,520 without a penalty if his/her earnings are less that amount when the FRA is reached (April 1st).
But in your example, you are dividing 56,520 by 12 months of the year which will make it a monthly max of 4,710 until FRA. In the case above, the FRA is April 1st, only 4 months into the year before reaching FRA which would make it a computation of 56,520 divided by 4, giving a monthly max of 14,130 before penalty kicks in.
In a nutshell, in your interpretation a retiree cannot have an annual salary greater than 56,520 (4,710×12) if they want to avoid a penalty in their FRA year. In my interpretation a retiree can make up to an annual salary of 169,560 (14,130×12) before the penalty kicks in. Please confirm.
How about tips as a stylist
Do you have to contact social security every year that you work if your income could be a little different each year?