Staying on the Job

questions & answers

Question: I have taken early soc sec retirement. if i exceed the soc sec ceiling on income next year (2007), when and how is the benefit adjustment made to my current soc sec check. Do I have to file anything?

Answer:

According to the Social Security Administration, a person can continue to work and still receive retirement benefits. The earnings in (or after) the month the person reaches full retirement age will not reduce the Social Security benefits. However, the benefits will be reduced if the earnings exceed certain limits for the months before the person reaches full retirement age.

Here is how it works: If the person is younger than full retirement age, $1 in benefits will be deducted for each $2 in earnings he or she has above the annual limit. In the year the person reaches full retirement age, your benefits will be reduced $1 for every $3 earned over an annual limit until the month that full retirement age is reached. Once full retirement age is reached, a person can keep working, and his or her Social Security benefit will not be reduced no matter how much is earned. If, during the year, the person’s earnings are higher or lower than he or she estimated, he or she should notify the Social Security Administration as soon as possible so the benefits can be adjusted correctly.

The amount of your Social Security benefits are adjusted in 2007 based on what was told to the Social Security Administration that the person thought he or she would earn this year. If it is likely that the earnings for 2007 will be different than what was originally estimated, it is important to contact the Social Security Administration right away. To calculate the impact of estimated earnings on Social Security payments, go to the Social Security Office customer help online  and type in “236” in the “Search” box and press “enter.”

For more information on how earnings affect retirement benefits, visit the Office of Social Security online   and ask for '"How Work Affects Your Benefits" (Publication No. 05-10069), which has current annual and monthly earnings limits and other general information regarding this topic.