Working while collecting Social Security can lead to benefits being withheld if earnings exceed limits

From Nasdaq: 2025-03-14 04:09:00

Summary:
Retirement doesn’t always mean leaving work behind completely. Many find benefits in working during retirement, like staying active and expanding their social network. Working can also provide extra income that may come in handy, especially for those worried about depleting savings too soon. However, if you plan to work while collecting Social Security, be aware of earnings-test limits. Exceeding these limits could result in having some Social Security payments withheld. It may be beneficial to hold off on claiming Social Security until reaching full retirement age to avoid reduced monthly benefits due to working.

Additionally, if you earn too much and have Social Security income withheld, those benefits will not be paid back in a lump sum. Instead, you’ll receive higher monthly benefits starting at full retirement age. Understanding how earnings-test limits work and assessing if claiming benefits early is the right choice is crucial for retirees. Working during retirement can be positive, but it’s important to navigate Social Security rules to maximize benefits.



Read more at Nasdaq: Claiming Social Security While Working? Don’t Fall Into This Trap.