- Hey everyone, Bill Lethemon
here for MoneyEvolution.com. In today's video blog, I
wanna talk about working while collecting social security benefits. More specifically, I wanna
talk about working while collecting social security
before your full retirement age. So this is a topic that I think has been a little bit confusing for some people, so hopefully after watching today's video, things will make a little
bit more sense for you. So, as you may know, if
you're working and collecting social security benefits before
your full retirement age, the Social Security Administration
has some limitations as to how much income you
can earn for the year. For 2017, the number is $16,920. So if you earn more than that $16,920, you're gonna have to
pay back $1 in benefits for every $2 that you earn over the limit. So to kind of make this really simple, if you're say $10,000
over that earnings limit, you're gonna have to
give back half of that, or $5000, you're gonna have to pay back to the Social Security Administration. So the first thing is that
if you're gonna be working and collecting social security benefits, really put some thought
into it and make sure that you're gonna be underneath
that earnings limitation because if you end up over that, things can really get a
little bit complicated and I'm gonna share with
you at the end of this video a real example of one of our clients that ended up having a
situation that ended up being pretty confusing, so
I think you'll hopefully find that interesting, so make
sure you actually need that, make sure you're gonna be
under the earnings limitation. Now, there's a couple of
exceptions to that earnings limit. One is in the very first
year that you apply for and begin collecting your
social security benefits, in that first year,
you're allowed to receive a full, unreduced social
security check for any month that the Social Security Administration considers you to be retired. For 2017, that limit
is $1410 for the month, so if you earn less than
$1410 for the month, you're gonna be considered
retired and you're gonna be able to receive a full social security check. Where that number came from,
that's simply that $16,920 divided by 12, comes out to be that $1410. So a quick example of that,
let's say that you're planning on retiring at the end of
August, so you're gonna receive your first social security
check in September, you can earn as much as
you earn for those first eight months of the year
and then as long as you earn less than that $1410 from
September through the rest of the year, you'll be able to collect that full social security check. The second exception to
that earnings limitation is in the year that you
turn full retirement age, so the limitation for
that year is $44,880, so you're allowed to
earn in the months prior to the month that you turn
your full retirement age, you're allowed to earn up to $44,880. After you reach full retirement
age, you can earn as much as you want with no reduction in
your social security benefit so another quick example
of this is let's say that, doing things simple, let's say
your birthday's on July 1st so in that first six months of the year, as long as you earn less than $44,880, and then you can earn as much
as you want after July 1st, there's gonna be no reduction
in your social security benefits so hopefully that
part makes a little bit of sense for you, I'm
gonna share with you now our example here from one of our clients that ended up in a situation
where he had to pay back some of his social security
benefits and like I said, this stuff can get really confusing. So one thing, I guess,
before I get into this story, that you may or may not know,
and this is part of the area that does get a little
confusing for some people, if you end up in a situation
where your social security benefits are withheld,
they're not lost forever. Social security will do a
recalculation of your benefits when you reach your full
retirement age and they're gonna give you credit back for
any month that you ended up having your social
security benefits withheld. So this particular client
retired and he began collecting social security benefits
right away at age 62 but about 15 months
after he began collecting social security benefits, he
got a job offer to go back and work at his old company
in a contract position. So he didn't really understand
fully the repercussions of earning over that social
security earnings limitation so he ended up in a situation
where he had to pay back really all of his social
security benefits. But this is actually his
social security statement for 2015 here, and just to give
you an idea of how confusing this can be, I'm gonna read
you a couple lines from this. So, "We paid you $12,165.30
less than we should have for "2013, we paid you $998 more
than we should have for 2014, "we paid you $170 more than we
should have so far this year. "After all adjustments,
we owe you $10,997.30." So sometimes it takes
Social Security really even a couple of years to kinda
catch up and figure out how all of those adjustments
are going to work. I went through all of his
social security statements and we think they got it pretty much right but it was pretty difficult
to really figure out exactly what was going
on with all of that. So the moral of the story
is that if you're planning on working before full retirement age and you're gonna collect
social security benefits, number one, make sure you
need them, maybe you can, maybe the income that you're
gonna earn by continuing to work is enough to
basically live off of that and you can earn some
delayed retirement credits and build up that social security benefit to at least your full retirement age. But if you are gonna work
and collect social security benefits, make sure that you're
under that earnings limit for the year because if
you start having to repay some of those social security benefits, things can get pretty confusing. So anyway, that's it for this video, I hope things make sense with all of that. If you have any questions
or would like to ask me a specific question about
your personal situation, please feel free to send me an
email, I will respond to it, I'd love to hear feedback and
we get questions like that all the time here in our office. Again, if you're watching
this video any place other than our blog at MoneyEvolution.com, head over there, check that
out, we've got some great free resources including
our social security guide that you can download as
a PDF, absolutely for free from that, so anyway, we'll
see everyone back here at our next video, have
a great day, thanks.
