Earning too much money from working after you start Social Security retirement benefits can cost you money. Taking these rules into account will help you plan your retirement finances so that you maximize the money you end up with. Once you reach full retirement age for Social Security benefits, money you earn working doesn't impact your benefit amount..

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Until you reach full retirement age, your benefits may be reduced if you work. For people born before , full retirement age is This is scheduled to gradually increase to 67 for people born in or later.

If you start benefits between the month you turn 62 and the month you reach full retirement age, the Social Security Administration will deduct one dollar from your annual benefit amount for every two dollars you make above an annual limit. At this point your benefit amount reaches zero. You might decide to start early Social Security benefits anytime during the year. If so, the SSA prorates the amount you are allowed to earn before imposing a benefit reduction.

Suppose you start benefits in July. Income for the first six months isn't counted. A different limit applies for the calendar year you reach full retirement age. If you make more, you lose one dollar for every three dollars above the limit. Starting the month you reach full retirement age, there is no income limit. The SSA counts only earnings from wages, salary, other employer-paid compensation and net earnings from self-employment when figuring out if your benefit amount will be reduced.

Annuities, pensions and retirement plan income are not included. Interest earnings and profits from investments are also not counted. You'll eventually get any money you lose due to earning too much from work while receiving early Social Security benefits.

Once you reach full retirement age, your benefit amount will be increased so that you recover this money over time. However, starting retirement benefits early means you get them for a longer period of time. To compensate, the SSA will permanently lower your monthly benefit. The amount of the reduction depends on how many months early you start benefits. If you start the month you turn 62, a maximum reduction in your monthly benefit of 25 percent applies.

This means you will only get 75 percent of the monthly payment you would get if you waited until full retirement age to start receiving benefits.

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These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. More Articles How Much Can You Earn While Drawing Social Security Benefits? Taxes on Social Security Benefits If You Retire at 62 Social Security Benefits Taxable After Age 65 How Much Will I Get From a Divorced Spouse's Social Security Benefits?

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Full Retirement Age Once you reach full retirement age for Social Security benefits, money you earn working doesn't impact your benefit amount.. Benefits and Work If you start benefits between the month you turn 62 and the month you reach full retirement age, the Social Security Administration will deduct one dollar from your annual benefit amount for every two dollars you make above an annual limit.

Adjustments You might decide to start early Social Security benefits anytime during the year. Social Security Income The SSA counts only earnings from wages, salary, other employer-paid compensation and net earnings from self-employment when figuring out if your benefit amount will be reduced.

Considerations You'll eventually get any money you lose due to earning too much from work while receiving early Social Security benefits. References 3 Social Security: Full Retirement Age Social Security: How Work Affects Your Benefits. About the Author Based in Atlanta, Georgia, W D Adkins has been writing professionally since Recommended Articles How Much Do Military Credits Increase Social Security Benefits?

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