How Much Can You Work and Not Affect Your Social Security Benefit

June 29, 2022 — More than a few retirees who could use the money turn down work that they would like to do. The reason: fear that their Social Security benefits will be reduced. To help people understand what they can and cannot do when it comes to how work might affect your Social Security benefits, here are the facts to help you decide the best course of action for you.

Reached Full Retirement Age

If you have reached your Full Retirement Age (FRA) – 66 if you were born in 1954 or before, gradually reaching 67 for those born in 1960 or later – there is good news. You can work and earn as much as you want and it will not affect your Social Security benefit in any way.

Haven’t reached Full Retirement Age Yet

For those who are receiving Social Security benefits but have not yet reached your FRA, there is still no limit on how much you can earn. But, depending on how much you earn, you may find some of your benefits reduced. How much that reduction might be depends on how close you are to your FRA.

In 2022, if you’re under full retirement age, the annual earnings limit without any penalty is $19,560. If you will reach full retirement age in 2022, the limit on your earnings for the months before full retirement age is $51,960.

If you are under full retirement age for the entire year, the SSA will deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2022, that limit is $19,560.

In the year you reach full retirement age, SSA deducts $1 in benefits for every $3 you earn above the 2022 limit of $51,960. They only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year.

Starting with the month you reach full retirement age, there is no limit on how much you can earn without a benefit reduction.

Let’s look at a few examples (this data is from the Social Security website and your earnings might be different). You are receiving Social Security retirement benefits every month in 2022 and you:

• Are under full retirement age all year. You are entitled to $800 a month in benefits. ($9,600 for the year)You work and earn $29,560 ($10,000 over the $19,560 limit) during the year. Your Social Security benefits would be reduced by $5,000 ($1 for every $2 you earned over the limit). You would receive $4,600 of your $9,600 in benefits for the year. ($9,600 – $5,000 = $4,600)
• Reach full retirement age in August 2022. You are entitled to $800 per month in benefits. ($9,600 for the year)You work and earn $63,000 during the year, with $52,638 of it in the 7 months from January through July. ($678.00 over the $51,960 limit)
  • Your Social Security benefits would be reduced through July by $226 ($1 for every $3 you earned over the limit). You would still receive $5,374 out of your $5,600 benefits for the first 7 months. ($5,600 – $226 = $5,374)
  • Beginning in August 2022, when you reach full retirement age, you would receive your full benefit ($800 per month), no matter how much you earn.

Note that pensions and investment income is not included in the limit.

But you will probably get these reductions back!

What most people do not consider in their retirement planning is that the SSA recalculates your Social Security monthly benefit at FRA to credit you for Social Security benefit payments withheld due to earnings over the limit. You won’t get a lump sum, but it will be spread out over time as a higher benefit. And, just as important, those extra earning years will probably help to increase the 35 year earnings record that is the basis of your benefit level.

For further reading:

Myth: It Doesn’t Pay to Work After You Claim Social Security

Comments? Have you ever turned down work because you were afraid it might cost you SS benefits? Did you know that any benefit reduction will eventually be returned to you? Please share your thoughts in the Comment section below.

June 28, 2022 — Back in 2018 Pamela shared her ideas on looking for an amenity-lite active community. That article, When Amenity Rich Is Not the Answer, was clearly relevant to many of our Members and sparked 60 Member Comments (which were turned into another article: “When Amenity Lite Is the Answer“). Recently we heard back from Pamela on a related topic. She recounted her experience in selling her home in 2020, along with its aftermath and sellers remorse. We are grateful for her sharing her story; it is always fascinating to hear about actual experiences in the retirement world. We wish her and anyone else in this tough market who has faced challenges well. Note: This article makes an excellent counterpoint and addition to last week’s “Time to Sell Your Home and Rent” post.

Here is her story (with minor edits):

Pamela: I am still dealing with the absolute worst mistake of my life – selling my home that I owned for 28 years and lived in since it was new.  Since you’re always looking for new topics to write about, I wanted to update you on my situation, hopefully generating some helpful insights and advice from your great subscribers. 

June 22, 2022 — Two new studies have found that people who regularly exercise are much more likely to live longer. Fortunately, many people are interested enough in their health that they set daily goals for various activities, like how many steps they take each day. New devices like Fitbits, Apple Watches, and smartphones make that especially easy to do. But how much activity, like the number of steps, is the right number?

For many people 10,000 steps has become a popular goal. Achieving that frequently becomes an obsession or often a competition with friends. They brag about how many steps they got, or worry about a bad day. Hitting 10,000 steps a day is a lot – with a 3′ stride (slightly longer than most people’s) – that would translate to over 5.6 miles. There are a number of other goals that some people set up for themselves, such as the amount of active energy expended (such as 700 calories), floors walked up (e.g.; 5), the number of standing hours (e.g.; 12), or minutes getting some other type of exercise.

June 18, 2022 — The last two and half years have provided an amazing ride for homeowners In almost every part of the U.S. Most sellers probably had to fight off buyers willing to pay far more than the asking price, and ended up with a buyer the same day they put it on the market. For renters, it wasn’t such a great period, with rents high and hard to find.  In 2019 the NAR median sales price of a home in the U.S. was $274,600. Two years later, that price has risen to $368,200, a 34% increase, certainly one of the most meteoric rises in history. The Census Bureau reported a similar increase in the average price of a home, now at $570,300. Those double digit increases put a smile on many people’s faces, but is it time to think change is a coming?

June 15, 2022 — One of the most frequent questions we get from Members is how to find a great place to spend the winter as a snowbird. Their questions usually center on where to go, and how to find a good one. In this article we will share some basic steps on how to get started. Best of all, we will highlight some of the most interesting and useful Comments from our Members on this topic.

Two Keys to Success
The keys to success in finding a good snowbird rental are quite simple: get started early, and use every option you can think of. One strategy that rarely yields good results is hoping to luck into something at the last minute.

Many Advantages
There are many advantages to renting in a warm place for some or all of the winter. There is the obvious one: it gets you out of the frozen Midwest, icy Northeast, or the dark/dreary/wet Pacific Northwest for a pleasant interlude in the sun. Another big advantage of snowbird rentals is that they give you a chance to see and experience different parts of the country with very little risk or expense. If you ever decide to purchase a place either as a snowbird or for year-round living, you will be a much more educated buyer. Yet another advantage: it provides an opportunity to be visit friends and family without overstaying your welcome.

June 8, 2022 — It is fascinating to see which of the thousands of 55 plus and active communities reviewed at Topretirements attract the most attention from our Members and visitors. After examining site visit data from the first 5 months of 2022, here are the 15 most popular communities in the states west of the Mississippi at Topretirements. If you are considering communities east of here, don’t miss the “Most Popular Active Adult Communities in the Southeast“.

A few words about these selections

The most amazing thing about these communities is their diversity and variety. We are not sure why they emerged at the top of popularity (most page views on our site), but they are the communities our Members and guests most wanted to learn about. Their variety speaks to the idea that there no cookie cutter community approach that appeals to everyone. Instead, people are very different in what they are looking for – and the good thing is there is a community for everyone. While these active adult and 55+ communities are very different, they are the tip of the iceberg when it comes to the variety that is available in the U.S. Interesting enough, only one of these communities, Quail Run, was a repeat from our 2019 ranking.

June 6, 2022 — Social Security Trust Funds are now projected to last one year longer, as outlined in the latest Trustees Report. High employment rates and lower disability claims, it seems, have increased contributions to the retirement fund (OASI).

Thanks to those, instead of the retirement trust fund (OASI) becoming exhausted in 2033, that event has been pushed back to 2034. The disability (DI) fund is now expected to last at least for 75 years, up from 2057. At this time, there is no consensus among experts on the lasting effects of the COVID-19 pandemic. The Trustees currently assume that the pandemic will have no net effect on their long-range projections. The assumptions for their report were determined in mid-February 2022, and they are uncertain regarding the path of the COVID-19 pandemic and the economy in the near-term.

Based on their best estimates, the 2022 reports determine:

• The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits on a timely basis until 2034, one year later than reported last year. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 77 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund, which pays disability benefits, is no longer projected to be depleted within the 75-year projection period. By comparison, last year’s report projected that it would be able to pay scheduled benefits only until 2057.

• The Hospital Insurance (HI) Trust Fund, or Medicare Part A, which helps pay for services such as inpatient hospital care, will be able to pay scheduled benefits until 2028, two years later than reported last year. At that time, the fund’s reserves will become depleted and continuing total program income will be sufficient to pay 90 percent of total scheduled benefits.

• The Supplemental Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs. Due to these funding provisions and the rapid growth of its costs, SMI will place steadily increasing demands on both taxpayers and beneficiaries.

Bottom line

The Trustees included their customary warnings to Congress about the impending shortfalls, which traditionally fall on deaf ears. Social Security is the third rail for politicians, and it is the rare one who has the courage to tackle it. As the Trustees point out, the earlier the problem is fixed the less bitter the medicine will be. Our suggestion is to ask any political candidate for national office what their position is on fixing Social Security, and see what they say (and they do).

Take the Quiz:

What Is Your Social Security IQ

June 4, 2022 – Five years ago we opined about the 10 things we think we learned after ten years of being retired. We took another look at that article, and it all still makes sense. But we couldn’t resist adding three more that hadn’t occurred the first time. Here is a link to the now updated article from 2016. The Member comments alone make it worthwhile!

What I Learned After 15 Years of Retirement

May 31, 2022 — Many of America’s most hated companies are the cable, internet and telephone giants – Comcast/Xfinity, Century Link, Sprint, etc. People dread calling these behemoths for customer service, because they know they will get into a never-ending telephone tree that make it very difficult to speak to a human being. They also don’t like the bills that come along with telephone, cable and internet service. The bill starts out looking reasonable, but after you add in the modem and cable box rental fees, broadcast and sports fees, and 6 different kinds of taxes, the total tab can easily approach $300/monthly. Adding more sports packages and HBO can send it north of that. And of course, every year the bill goes up. For retirees on a budget, these bills can become just too much.

After talking with friends your editor decided to cut the cord – or at least 2 of the cords – home phone and cable. Here is how he did it.

Alternative to cable TV

There are several good alternatives to cable TV.

May 26, 2022 — Sooner or later the “what are you going to do” question comes up in conversations about retirement. For a whole lot of people their answer is: “Maybe we’ll take a river cruise”. Then the big question is where? There are so many great possibilities. For sake of conversation, here are 10 of the best ideas for river cruises, and we would love to hear Member suggestions as well. We will publish another article on other types of cruises in the future.

What kind of river trip?

For the purposes of this article we are breaking these cruises into 4 categories: American, European, International, and Adventure. In addition to where you take your river trip, you also need to decide what company will take you down that river, and in what kind of style. There are a number of companies that offer river cruises for a host of different budgets and tastes, so you don’t have to stick with the brand names you might have heard about. Talking with friends and your travel agent is a good way to find the one best suited to your needs and budget. We will list some of those operators under each category, but if you search the Internet you will be pleased with how many options there are.