Can I Receive Social Security Benefits While I'm Still Working?

Retirement Central
Written By gbfadmin
can i receive social security while I'm still working

can i receive social security while I'm still working

The short answer is "Yes". But you may not want to depending on when you plan to turn on your social security benefits and how much you plan to earn each year from working.

Electing social security benefits AFTER your Normal Retirement Age

For social security, your Normal Retirement Age (NRA), is the age you are eligible to receive full retirement benefits. Your NRA is based on your date of birth and the table is listed below:

delaying social security

delaying social security

Once you reach your NRA, you are allowed to begin receiving social security benefits without having to worry about the social security "earnings test". Meaning that you can earn as much as you want working and they will not reduce your social security benefit. You are free and clear.

Electing social security benefits BEFORE your Normal Retirement Age

If you turn on your social security benefits prior to reaching your Normal Retirement Age, you will be subject to the "earnings test" each year. For social security recipients who will not reach full retirement age in the 2016 calendar year, the first $15,720 in earnings is exempt. Beyond that amount, every $2 in earnings will reduce your social security benefits by $1. It's a fairly steep penalty. The general rule is if you plan to earn over the $15,720 threshold and you will not hit your normal retirement age for social security in 2016, do not elect to begin taking social security early because you will lose most of it from the "earned income penalty".

Electing social security benefits in the year your reach "Normal Retirement Age"

For social security recipients who will attain full retirement age during 2016, the first $41,880 is exempt, and the reduction is just $1 for every $3 in earnings beyond that point. Plus, only the months before your birthday count toward the total.

We advise our clients in this situation to keep their pay stub from the payroll period prior to reaching Normal Retirement Age because the IRS may contact them the following year to prove the amount of income that they earned prior to receiving their first social security payment.

Michael Ruger

Michael Ruger

About Michael.........

Hi, I'm Michael Ruger. I'm the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.

Related Posts
Don’t Gift Your House To Your Children
Don’t Gift Your House To Your Children

A common financial mistake that I see people make when attempting to protect their house from a long-term care event is gifting their house to their children. While you may be successful at protecting the house from a Medicaid spend-down situation, you will also inadvertently be handing your children a huge tax liability after you pass away. A tax liability, that with proper planning, could be avoided entirely.

Secure Act 2.0:  RMD Start Age Pushed Back to 73 Starting in 2023
Secure Act 2.0:  RMD Start Age Pushed Back to 73 Starting in 2023

On December 23, 2022, Congress passed the Secure Act 2.0, which moved the required minimum distribution (RMD) age from the current age of 72 out to age 73 starting in 2023. They also went one step further and included in the new law bill an automatic increase in the RMD beginning in 2033, extending the RMD start age to 75.

Turn on Social Security at 62 and Your Minor Children Can Collect The Dependent Benefit
Turn on Social Security at 62 and Your Minor Children Can Collect The Dependent Benefit

Not many people realize that if you are age 62 or older and have children under the age of 18, your children are eligible to receive social security payments based on your earnings history, and it’s big money. However, social security does not advertise this little know benefit, so you have to know how to apply, the rules, and tax implications.

Self-Employment Income In Retirement? Use a Solo(k) Plan To Build Wealth
Self-Employment Income In Retirement? Use a Solo(k) Plan To Build Wealth

It’s becoming more common for retirees to take on small self-employment gigs in retirement to generate some additional income and to stay mentally active and engaged. But, it should not be overlooked that this is a tremendous wealth-building opportunity if you know the right strategies. There are many, but in this article, we will focus on the “Solo(k) strategy

Grandparent Owned 529 Accounts Just Got Better
Grandparent Owned 529 Accounts Just Got Better

A 529 account owned by a grandparent is often considered one of the most effective ways to save for college for a grandchild. But in 2023, the rules are changing………

Self-employed Individuals Are Allowed To Take A Tax Deduction For Their Medicare Premiums
Self-employed Individuals Are Allowed To Take A Tax Deduction For Their Medicare Premiums

If you are age 65 or older and self-employed, I have great news, you may be able to take a tax deduction for your Medicare Part A, B, C, and D premiums as well as the premiums that you pay for your Medicare Advantage or Medicare Supplemental coverage.

Selecting The Best Pension Payout Option
Selecting The Best Pension Payout Option

When you retire and turn on your pension, you typically have to make a decision as to how you would like to receive your benefits which includes making a decision about the survivor benefits. Do you select….

Buying A Second House In Retirement
Buying A Second House In Retirement

More and more retires are making the decision to keep their primary residence in retirement but also own a second residence, whether that be a lake house, ski lodge, or a condo down south. Maintaining two houses in retirement requires a lot of additional planning because you need to be able to answer the following questions:

Why Are Long-Term Care Insurance Premiums Skyrocketing?
Why Are Long-Term Care Insurance Premiums Skyrocketing?

Many individuals that have long-term care insurance policies are beginning to receive letters in the mail notifying them that that their insurance premiums are going up by 50%, 70%, or more in some cases. This is after many of the same policyholders have experienced similar size premium increases just a few years ago. In this article I’m going to explain……

Do You Have To Pay Tax On Your Social Security Benefits?
Do You Have To Pay Tax On Your Social Security Benefits?
Retirement Account Withdrawal Strategies
Retirement Account Withdrawal Strategies

The order in which you take distributions from your retirement accounts absolutely matters in retirement. If you don’t have a formal withdraw strategy it could end up costing you in more ways than one. Click to read more on how this can effect you.

When To Enroll In Medicare
When To Enroll In Medicare

Medicare has important deadlines that you need to be aware of during your initial enrollment period. Missing those deadlines could mean gaps in coverage, penalties, and limited options when it comes to selecting a Medicare

How Do Social Security Survivor Benefits Work?
How Do Social Security Survivor Benefits Work?

Social Security payments can sometimes be a significant portion of a couple’s retirement income. If your spouse passes away unexpectedly, it can have a dramatic impact on your financial wellbeing in retirement. This is especially

Medicare Supplemental Plans ("Medigap") vs. Medicare Advantage Plans
Medicare Supplemental Plans ("Medigap") vs. Medicare Advantage Plans

As you approach age 65, there are a lot of very important decisions that you will have to make regarding your Medicare coverage. Since Medicare Parts A & B by itself have deductibles, coinsurance, and no maximum out of pocket

IRA RMD Start Date Changed From Age 70 ½ to Age 72 Starting In 2020
IRA RMD Start Date Changed From Age 70 ½ to Age 72 Starting In 2020

The SECURE Act was passed into law on December 19, 2019 and with it came some big changes to the required minimum distribution (“RMD”) requirements from IRA’s and retirement plans. Prior to December 31, 2019, individuals

Introduction To Medicare
Introduction To Medicare

As you approach age 65, there are very important decisions that you will have to make regarding your Medicare coverage. Whether you decide to retire prior to age 65, continue to work past age 65, or have retiree health benefits,

Potential Consequences of Taking IRA Distributions to Pay Off Debt
Potential Consequences of Taking IRA Distributions to Pay Off Debt

Once there is no longer a paycheck, retirees will typically meet expenses with a combination of social security, withdrawals from retirement accounts, annuities, and pensions. Social security, pensions, and annuities are usually fixed amounts, while withdrawals from retirement accounts could fluctuate based on need. This flexibility presents

How To Change Your Residency To Another State For Tax Purposes
How To Change Your Residency To Another State For Tax Purposes

If you live in an unfriendly tax state such as New York or California, it’s not uncommon for your retirement plans to include a move to a more tax friendly state once your working years are over. Many southern states offer nicer weather, no income taxes, and lower property taxes. According to data from the US Census Bureau, more residents

Advanced Tax Strategies For Inherited IRA's
Advanced Tax Strategies For Inherited IRA's

Inherited IRA’s can be tricky. There are a lot of rules surrounding;

Establishment and required minimum distribution (“RMD”) deadlines

Options available to spouse and non-spouse beneficiaries

Strategies for deferring required minimum distributions

Special 60 day rollover rules for inherited IRA’s

What Happens To My Pension If The Company Goes Bankrupt?
What Happens To My Pension If The Company Goes Bankrupt?

Given the downward spiral that GE has been in over the past year, we have received the same question over and over again from a number of GE employees and retirees: “If GE goes bankrupt, what happens to my pension?” While it's anyone’s guess what the future holds for GE, this is an important question that any employee with a pension should

Should I Rollover My Pension To An IRA?
Should I Rollover My Pension To An IRA?

Whether you are about to retire or if you were just notified that your company is terminating their pension plan, making the right decision with regard to your pension plan payout is extremely important. It's important to get this decision right because you only get one shot at it. There are a lot of variables that factor into choosing the right option.

How Much Should I Budget For Health Care Costs In Retirement?
How Much Should I Budget For Health Care Costs In Retirement?

The number is higher than you think. When you total up the deductibles and premiums for Medicare part A, B, and D, that alone can cost a married couple $7,000 per year. We look at that figure as the baseline number. That $7,000 does not account for the additional costs associated with co-insurance, co-pays, dental costs, or Medigap insurance

Lower Your Tax Bill By Directing Your Mandatory IRA Distributions To Charity
Lower Your Tax Bill By Directing Your Mandatory IRA Distributions To Charity

When you turn 70 1/2, you will have the option to process Qualified Charitable Distributions (QCD) which are distirbution from your pre-tax IRA directly to a chiartable organizaiton. Even though the SECURE Act in 2019 changed the RMD start age from 70 1/2 to age 72, your are still eligible to make these QCDs beginning the calendar year that you

How Do Inherited IRA's Work For Non-Spouse Beneficiaries?
How Do Inherited IRA's Work For Non-Spouse Beneficiaries?

The SECURE Act was signed into law on December 19, 2019 which completely changed the distribution options that are available to non-spouse beneficiaries. One of the major changes was the elimination of the “stretch provision” which previously allowed non-spouse beneficiaries to rollover the balance into their own inherited IRA and then take small

Social Security Filing Strategies
Social Security Filing Strategies

Making the right decision of when to turn on your social security benefit is critical. The wrong decision could cost you tens of thousands of dollars over the long run. Given all the variables surrounding this decision, what might be the right decision for one person may be the wrong decision for another. This article will cover some of the key factors to

Required Minimum Distribution Tax Strategies
Required Minimum Distribution Tax Strategies

If you are turning age 72 this year, this article is for you. You will most likely have to start taking required minimum distributions from your retirement accounts. This article will outline:

Social Security Loophole: Age 62+ With Kids In High School
Social Security Loophole: Age 62+ With Kids In High School

There is a little known loophole in the social security system for parents that are age 62 or older with children still in high school or younger. Since couples are having children later in life this situation is becoming more common and it could equal big dollars for families that are aware of this social security filing strategy.

Should I Establish A Power of Attorney?
Should I Establish A Power of Attorney?

There are three key estate documents that everyone should have: Will, Health Proxy, Power of Attorney, If you have dependents, such as a spouse or children, the statement above graduates from “should have” to “need to

Who Pays The Tax On A Cash Gift?
Who Pays The Tax On A Cash Gift?

This question comes up a lot when a parent makes a cash gift to a child or when a grandparent gifts to a grandchild. When you make a cash gift to someone else, who pays the tax on that gift? The short answer is “typically no one does”. Each individual has a federal “lifetime gift tax exclusion” of $5,400,000 which means that I would have to give

Should I Gift A Stock To My Kids Or Just Let Them Inherit It?
Should I Gift A Stock To My Kids Or Just Let Them Inherit It?

Many of our clients own individual stocks that they either bought a long time ago or inherited from a family member. If they do not need to liquidate the stock in retirement to supplement their income, the question comes up “should I just gift the stock to my kids while I’m still alive or should I just let them inherit it after I pass away?” The right answer is

gbfadmin
Previous

Do I Have to Pay Taxes on my Social Security Benefit?
Next

Inherited IRA's: How Do They Work?