As studies continually show that a significant percentage of baby boomers are not financially prepared for retirement many people are coming to the realization that they will have to continue to work when they become senior citizens. With this in mind retirement planning lawyers are often asked questions regarding how earning a paycheck may impact your Social Security benefits.
To address the question you must first understand when you become eligible for Social Security. The age at which you become eligible to receive your full benefit varies depending on the year of your birth. If you are not presently receiving Social Security you will become eligible sometime between your 66th and 67th birthdays.
You do have the option of applying early if you want to but your monthly benefit amount will be lower than it would be if you waited until you reach full retirement age. The earliest that you can start to receive Social Security is at age 62.
If you retire at 62 and continue to work you could earn up to $14,640 per year and your benefit would not suffer at all. Should you earn more than this your benefit would be temporarily reduced by one dollar for every two dollars that you make above this $14,640 threshold. (It should be noted that this figure is in place for 2012 and it is subject to change.)
Once you reach the age of full eligibility you are no longer subject to any reduction in your benefit regardless of how much money you make working.
People who continue to bring in a paycheck while receiving Social Security benefits can often times enjoy financial comfort without any undue stress. The key is to find something that you enjoy doing that fits in with your desired retirement lifestyle.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
- If a Beneficiary Dies During Probate What Happens to the Inheritance? - September 18, 2019
- Is Your Power of Attorney Powerless? What to Do When a Third Party Won’t Honor an Agent’s Authority - September 11, 2019
- Are There Different Types of Special Needs Trusts? - September 4, 2019