Q: CAN I RECEIVE SOCIAL SECURITY BENEFITS AND STILL WORK?
Since this is the first edition of “Ask a Tax Pro” I am going to have to cheat and make my own question.
This is a question that many people have asked us before and it’s a tricky one.
Many of our clients receive Social Security but still want to work, the $64,000 question is there any effect?
The answer like a lot of things depends. The short answer is yes, but if you took Social Security early your benefits could be lowered. First some background information.
You can start receiving Social Security at age 62. However, this is not your “Retirement Age”. Your Retirement Age is based on your birthday. If you were born after 1959 its 67. For anyone else go to https://www.ssa.gov/planners/retire/ageincrease.html and enter your birth year.
If you take your benefits before your Retirement Age Social Security lowers the amount you get each month, so usually it’s a good idea to wait.
TWO POSSIBLE CATEGORIES, WHICH ONE IS YOU?
1. I AM ALREADY AT MY RETIREMENT AGE DO I HAVE ANYTHING TO WORRY ABOUT?
Good News for you! There is nothing to worry about. Social Security will not lower your benefits regardless of how much you earn.
2. I AM BELOW MY RETIREMENT AGE AND WORKING IN ISRAEL WHAT ARE THE RULES I HAVE TO WORRY ABOUT?
The only way to describe these rules is weird.
Instead of worrying about how much money you made, the Social Security Administration cares about how much time you spent working.
Social Security starts lowering benefits for every month you work more than 45 hours. It doesn’t matter if you work for yourself or someone else. Since this will be reported to Social Security after it happens, and you have already received benefits, the lowering of benefits will probably result in having to reimburse Social Security plus paying back penalties and interest. A client of ours had to pay Social Security $16,000 in benefit reimbursements, penalties and interest.
Note: If you are below your retirement age and working in the US then the rules are different and based on income. Contact us for more details.
Remember these rules only apply if you are below your full Retirement Age, once you hit that age (67 if you are born after 1959) you can earn as much as you want. So, if you take Social Security before your full Retirement Age but are planning on still working things could get messy.
Have a question for “Ask a Tax Pro” send your questions to: Jason@emca-cpa.com and put “Ask a Tax Pro in the subject line.”