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Can I Get Social Security Retirement Benefits If I'm Working?

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Question: Can I Get Social Security Retirement Benefits If I'm Working?
Answer:

Yes, you can get Social Security retirement benefits and continue to work. Beginning in the month you reach full retirement age, you can get full benefits without limits on your earnings (the month you turn 66 years old is full retirement age in 2012). If you apply for benefits at age 62 or before full retirement age, any wages you earn will reduce the amount you receive in benefits. However, these benefits are not lost. Whatever is withheld now will end up increasing your benefits once you reach full retirement age.

There is a formula for how much your benefit is reduced if you start taking benefits before full retirement age. Social Security will deduct $1 in benefit payments for every $2 you earn above the annual limit. The annual limit in 2012 is $14,640.

In the year that you reach full retirement age but before the month of your birthday, Social Security will deduct $1 in benefit payments for every $3 you earn above a different limit, $38,880 in 2012.

If you work for someone else, Social Security will count your wages against annual limits. If you are self-employed, your net earnings will be counted when you receive them not when you earn them. Income from things like government benefits, investments, pensions and annuities are not counted (but your contribution to a retirement plan will be counted in your gross earnings).

There is a special earnings rule that applies if your earnings are over the limit during the first year of retirement. Under this rule, you can get a full Social Security check for any whole month that you are considered retired regardless of your annual earnings. If you will not turn 66 in 2012, you are considered retired in any month that your earnings are less than $1220 and you were not self employed. Or if you do turn 66 in 2012, you are considered retired in any month that your earnings are $3240 or less and you were not self employed.

The rule actually refers to self employment as "substantial services in self employment." Social Security defines retirement in very specific terms. You are retired if you work less than 15 hours per month. You are definitely not retired if you work more than 45 hours per month. If you work somewhere in between 15 and 45 hours a month, your retirement status depends on the type of work you do. Highly skilled professionals working more than 15 hours a month are generally considered not retired by Social Security.

There are different rules if you are receive Social Security survivor benefits or Social Security disability income, or if live outside of the United States. You can contact Social Security at 1-800-772-1213 if you have any questions about these situations, or about how to figure out your self-employment status or your earnings.

Find out more about Social Security:
When Can I Apply for Social Security Retirement Benefits?
How to Apply for Social Security Retirement Benefits
Understanding Spousal Social Security Benefits
Can I Get Social Security Benefits If I'm Working?
Taxes on Social Security Benefits
Making Sense of Medicare

Source: Social Security Administration, 2012

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