When you’re planning for retirement understanding all the details regarding Social Security is important. While it is not a good idea to be overly reliant on Social Security during your retirement years, unless you are of extraordinary means your Social Security benefit is going to be at least marginally relevant.
There are unprecedented numbers of people applying for Social Security right around now as the baby boomers reach retirement age, so there are a lot of questions circulating. Many people would like to continue working at least part-time while they are receiving Social Security benefits and this raises the question of whether or not you are penalized for doing so.
The answer is yes and no. If you were born in 1954 or earlier than that, you reach full retirement age when you celebrate your 66th birthday. Full retirement age then graduates by two months per year through 1959. So if you were born in 1955 your full retirement age is 66 years and two months; if you were born in 1956 it is 66 years and four months, and so on. For those born in 1960 and after full retirement age is 67.
If you wait until you reach full retirement age to receive your benefit you can earn an unlimited amount of money working and you still receive your Social Security benefit in full.
However, you may begin collecting Social Security when you’re as young as 62 if you are willing to accept a reduced benefit. People who continue working while receiving Social Security before they reach the full eligibility age have their benefit reduced by one dollar for every two dollars that they earn over $14,160 annually.
The above figures are accurate while this is being written, but they are always subject to change. If you would like to keep up to date at all times you may want to visit the website of the Social Security Administration on a frequent basis.
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.