How much can you earn while collecting social security?
Understanding the financial implications of collecting social security is crucial for individuals approaching retirement age. Social security benefits are designed to provide a steady income during retirement, but there are limitations on how much you can earn while still receiving these benefits. This article will explore the rules surrounding earnings limits and how they affect your social security income.
Initial Earnings Limit
When you begin collecting social security, there is an initial earnings limit. For individuals who reach full retirement age (FRA), this limit is $18,960 per year. If you earn more than this amount, your social security benefits will be reduced by $1 for every $2 you earn above the limit. This reduction is known as the earnings test.
Subsequent Earnings Limit
After reaching your FRA, the earnings limit increases. For individuals who reach FRA between 66 and 67, the limit is $50,520 per year. For those who reach FRA after 67, the limit is $51,960 per year. In this case, your benefits will be reduced by $1 for every $3 you earn above the limit.
Exemptions and Exceptions
It’s important to note that there are certain exemptions and exceptions to these earnings limits. For example, if you are disabled and collecting social security disability insurance (SSDI), there is no earnings limit until you reach your FRA. Additionally, if you are receiving survivor benefits, there is no earnings limit until you reach your FRA.
Impact on Your Social Security Benefits
It’s crucial to understand that the earnings test only applies to your Social Security retirement benefits, not your SSDI or survivor benefits. If you are receiving SSDI or survivor benefits, your benefits will not be affected by your earnings until you reach your FRA.
Planning Your Retirement Income
As you plan for retirement, it’s essential to consider how much you can earn while collecting social security. By understanding the earnings limits and their impact on your benefits, you can make informed decisions about your retirement income. It’s also advisable to consult with a financial advisor to ensure that you are maximizing your social security benefits and planning for a comfortable retirement.
Conclusion
In conclusion, understanding how much you can earn while collecting social security is crucial for planning your retirement income. By knowing the earnings limits and their impact on your benefits, you can make informed decisions to ensure a secure and comfortable retirement. Always consult with a financial advisor to get personalized advice tailored to your specific situation.
