Do You Receive Social Security Benitit if You Continue Work After Retirement Do Y
IT'S never too early to begin thinking about retirement especially when you want to get the most out of the Social Security benefits you paid into throughout your career.
Depending on when you decide to begin collecting Social Security will determine the amount you receive every month.
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Social Security replaces a percentage of your pre-retirement income based on your lifetime earnings.
It will vary depending on how much you earn and when you choose to start benefits.
Higher-income translates to a bigger benefit.
Social Security sets a cap on how much of your income it takes into account in figuring your benefit.
In 2022, the cap is $147,000. It's adjusted annually to reflect historical wage trends.
Any income above that is not counted in your benefit calculation and is also not subject to Social Security taxes.
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The amount you are entitled to will change due to other factors.
Workers planning for retirement should realize that retirement benefits depend on your age at retirement.
It's important to plan and save for years to achieve your retirement goals.
Here's how your Social Security benefits can change if you work after the age of 62.
Full retirement age
The full retirement age (FRA) is based on your birth year.
- Birth year: 1943-1954.FRA: 66
- Birth year:1955.FRA: 66 and two months
- Birth year:1956.FRA:66 and four months
- Birth year:1957.FRA:66 and six months
- Birth year: 1958.FRA: 66 and eight months
- Birth year: 1959.FRA:66 and 10 months
- Birth year: 1960 and later.FRA: 67
To give you an idea of how much your benefit will be reduced: based on a monthly benefit amount of $1,000, if you were born in 1960 and started receiving Social Security at age 62, your benefit would be reduced to $700.
Claiming Social Security early will permanently reduce your monthly check amount.
If you begin receiving benefits before your full retirement age, you will receive a reduced benefit.
You can choose to retire as early as the age of 62, but that will result in a deduction of benefits by as much as 30%.
If you receive benefits at full retirement age, it will result in larger benefits.
Delayed retirement age
When you delay benefits beyond your full retirement age, the amount of your retirement benefit will continue to increase up until age 70.
Delayed retirement credit is given for retirement after the normal retirement age.
For example, if you were born between 1943 and 1954, your full retirement age is 66.
If you start receiving benefits at age 66, you get 100% of your monthly benefit.
If you wait to receive Social Security until age 70, you'll get 132% of the monthly benefit because you delayed getting benefits for four years from your FRA.
Income level
To qualify for Social Security, you need at least 40 work credits. You earn up to four credits each year based on your earnings.
The portion of your pre-retirement wages that Social Security replaces is based on your highest 35 years of earnings.
Each extra year you work adds another year of earnings to your Social Security record.
Higher lifetime earnings can mean higher benefits when you choose to receive benefits.
As you approach retirement, check your earnings statement to make sure you have enough credits to qualify for Social Security.
How work affects your benefits
If you work and are fully retirement age or older, you may keep all your benefits, no matter how much you earn.
If you're younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits.
For example, if you're younger than full retirement age during all of 2022, the Social Security Administration (SSA) must deduct $1 from your benefits for each $2 you earn above $19,560.
If you reach full retirement age during 2022, the SSA must deduct $1 from your benefits for each $3 you earn above $51,960 until the month you reach full retirement age.
We help you calculate your retirement benefits.
Plus, we outline the exact dates when Social Security will be paid out in 2022.
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Source: https://www.the-sun.com/money/4531635/ways-social-security-benefits-change-work-after-62/
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