ASK KIM


Work and Still Get Social Security

Kimberly Lankford

You might not jeopardize your benefits if you get a job after retiring. Here are the rules.



I retired a few years ago and started taking Social Security benefits. But I've lost so much in my retirement accounts that I went back to work part-time to earn some extra money. Will this affect the benefits I receive?

It depends on how old you are and how much you earn. If you've already reached your full retirement age (which is 65 years and 10 months for people born in 1942 and 66 for people born in 1943 to 1954), then you can work as much as you'd like without losing any Social Security benefits, no matter how much you earn. See the Social Security Administration's chart for a list of full retirement ages based on the year you were born.

But if you haven't reached your full retirement age, then your new job could affect your Social Security benefits.

You can earn up to $13,560 in 2008 without jeopardizing any of your Social Security benefits if you don't reach your full retirement age this year. You lose $1 in benefits for every $2 you earn over that limit. The income limit will rise to $14,160 in 2009.

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The income limit is higher in the year you reach your full retirement age. If that happens in 2008, you can earn up to $36,120 for the months before you reach full retirement age without affecting your Social Security benefits, and the limit disappears the month you reach your full retirement age.. You'll lose $1 in benefits for every $3 you earn above that limit. The income limit rises to $37,680 for people who reach full retirement age in 2009.

Use the Retirement Earnings Test Calculator to figure the impact of your earnings on your benefits. For details about the rules, see the Social Security Administration's How Work Affects Your Benefits and You Can Work and Get Social Security at the Same Time.

If you do lose benefits to the earning test, however, they are not lost forever. Claiming benefits before your normal retirement age results in a lifetime reduction in benefits, based on the number of months you receive benefits early. But if you lose six months' worth of benefits to the earnings test, for example, then your future benefits will be recomputed -- and increased -- to account for the fact that you didn't get them six months early. In that case, your benefits would be calculated as if you started taking them at 62 years and 6 months of age.

For details about the calculation, see the Social Security Administration's When You Work and Get Social Security at the Same Time.

For more information about the best time to take your Social Security benefits, or strategies for boosting your benefits after you've already taken them, see When to Take Social Security Benefits and Secret Ways to Boost Your Social Security.

Got a question? Ask Kim at askkim@kiplinger.com.



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