Working During Retirement Can Affect Your Social Security Benefits

For Mark Roberts’ Use: While we all have an ideal retirement scenario in our imaginations, sometimes people do claim their Social Security benefits earlier than originally planned. Maybe you need to semi-retire a bit early, or your income from work has decreased. Perhaps you planned for an early retirement, but afterward realize that you would prefer a bit more income, so you go back to work. Whatever the reason, many people who receive Social Security do continue to work at least part-time.

Working during retirement can actually be a great idea. Work keeps us active, provides social contact, and prevents boredom. And, of course, there is the added benefit of a little extra income. But did you know that that income can affect your Social Security benefits? In fact, if you make “too much” money, in some cases part of your benefits checks will be withheld.

How does this happen? The first thing you need to know is that this rule does not affect all Social Security beneficiaries. Those who have reached their “full retirement age”, as defined by Social Security, can earn as much money as they want and their benefits will not be affected. We are specifically talking about those who claimed their benefits earlier than their full retirement age, and have yet to reach that age.

If you fall into that category, then one dollar of your Social Security benefits will be withheld for every two dollars that you earn about a certain threshold. Currently that limit is $16,920 annually, although it is adjusted upward from time to time.

That sounds like bad news, and it could be, if you were depending on receiving your full benefits while continuing to work. However, that money is not lost forever. Once you reach full retirement age, your benefits will be recalculated to include the withheld amounts.

Retirement planning is a complicated topic, and we don’t want issues like this one to take you by surprise. So, please schedule regular appointments with us as you prepare for retirement. We can help you anticipate and hopefully avoid any unpleasant surprises.

By Mark Roberts|2017-12-04T12:40:27-06:00December 4th, 2017|Retirement|0 Comments

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Working During Retirement Can Affect Your Social Security Benefits

Working During Retirement Can Affect Your Social Security Benefits

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About the Author: Mark Roberts