Social Security: Ways to work after you retire
Surveys show that an increasing number of older Americans want to retire from their jobs, but not retire from the workforce. They want to retire from the work they have done for most of their lives for 40 hours a week, but they also want to take up a second, perhaps part-time career.
If you are or expect to be one of these “semi-retirees” there is some important Social Security information you should keep in mind. The relationship among your work, earnings and eligibility for Social Security benefits depends largely on your age.
If you are “full retirement age” or older, your earnings will not reduce your Social Security benefits. Or to put it another way, once you reach that magic age, you can collect all the Social Security retirement benefits you are due no matter how much money you earn from working.
You can find a chart explaining full retirement age at www.socialsecurity.gov/retirechartred.htm.
You are between age 62 and the year you will reach full retirement age – The earliest you can apply for Social Security retirement benefits is age 62. In 2004, you can work and earn up to $11,640 with no reduction in your benefits. But for every $2 you earn over that, Social Security must hold back $1 in benefits. (Note: In the first year you receive Social Security benefits, you are guaranteed that benefit for any month you earn less than $970. And we do not count pensions, savings or investment income toward these threshold amounts – only wages or self-employment income.)
You are not yet full retirement age, but will reach full retirement age this year – The earnings threshold is more lenient in the year you reach your full retirement age. Beginning in January of that year and until the month before you reach full retirement age, Social Security would withhold $1 from your benefits for every $3 you earn over the earnings limit ($31,080 in 2004). Of course, the earnings thresholds are indexed for inflation, so they are updated yearly. And remember that beginning the month you reach full retirement age, there would be no earnings limits.
You can request a copy of the pamphlet, How Work Affects Your Benefits online: www.socialsecurity.gov/pubs/10069.html. Or you can call 1-800-772-1213 to request a free copy.