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Your earnings threshold: In the event you file for benefits before full retirement age and keep collecting a paycheck while doing so, you are subject to an earnings test. In 2022, the earnings test threshold is $19,560, and your benefit is reduced by one dollar per every two dollars you earn above that amount. On the other hand, if you reach your full retirement age while continuing to work and collect benefits, the earnings test threshold rises to $51,960, and your benefit is reduced by one dollar per every three dollars you earn above that amount. The good news? Withheld benefits prior to your full retirement age can be redeemed via an adjusted benefit, which increases to reflect surrendered prior benefits once you do reach full retirement age.
An even better benefit: Additionally, there are instances when working while collecting benefits increases your monthly payout. To calculate your retirement benefit, the Social Security Administration utilizes your lifetime earnings total (the combined amount of money you made during the 35 highest-earning years of your career). However, if after filing and working simultaneously, you experience a year that is one of your top 35 highest-earning years, it replaces one of your lowest-earning years, therefore raising your overall average.
Bottom line? It’s never bad to make money. NEVER.