Can you work while receiving social security retirement benefits? This is a common question among individuals approaching retirement age. The answer is both yes and no, depending on the specific circumstances and the rules set forth by the Social Security Administration (SSA). Understanding these rules is crucial for retirees who wish to maintain an active lifestyle or supplement their income through part-time work.
The SSA allows retirees to work while receiving retirement benefits, but there are certain limitations. The primary concern is the potential reduction in benefits if earnings exceed a certain threshold. According to the SSA, if you are receiving Social Security retirement benefits and work at the same time, your benefits may be reduced. However, this reduction only applies to earnings above a specific limit, which varies depending on your age.
For individuals who are younger than full retirement age (which is 66 for those born between 1943 and 1954), the SSA deducts $1 in benefits for every $2 earned above the annual limit. For those who have reached full retirement age, the SSA deducts $1 in benefits for every $3 earned above the annual limit. It’s important to note that these deductions only apply to earnings from employment; income from investments, dividends, or other sources is not subject to these deductions.
Moreover, the SSA provides a trial work period, which allows retirees to earn up to $17,640 in 2020 without any reduction in their Social Security benefits. During this trial work period, which lasts for a total of nine months, the SSA does not count earnings toward the earnings limit. After the trial work period, if earnings exceed the annual limit, the SSA will conduct a “monthly earnings test” to determine the extent of any benefit reduction.
Retirees should also be aware of the earnings test exception, which applies to those who have reached full retirement age. In this case, the SSA does not deduct any benefits for earnings, regardless of the amount. This exception allows retirees to work without worrying about the potential reduction in their Social Security benefits.
In conclusion, you can work while receiving social security retirement benefits, but it’s essential to understand the rules and limitations set by the SSA. By doing so, retirees can maintain an active lifestyle or supplement their income without facing unnecessary deductions in their Social Security benefits. Consulting with a financial advisor or the SSA can help ensure that you make informed decisions regarding your retirement benefits and work opportunities.
