Can Working Cut Your Social Security Benefits?

TL;DR

People who work while receiving early Social Security benefits risk losing some of their benefits based on their income level.

Transcript

social security is an essential part of most people's retirement plans but some people who work risk losing benefits they've already claimed for more i'm here with full director of investment planning dan kaplinger hey dan so how can people lose benefits if they work well basically what it comes down to is that if you decide both to take early bene... Read More

Key Insights

• 😚 Social Security recipients who claim benefits early but continue to work risk losing some of their benefits based on income levels.
• ⛔ The earnings limit for those aged 62-65 is $15,120, with a reduction of benefits for every two dollars earned above that limit.
• ⛔ Individuals turning 66 in the current year have a higher wage limit of around $40,000, with a reduction of benefits for every three dollars earned above that limit.
• 💦 The reduction of benefits can also apply to family members claiming benefits, depending on their own work history and earnings.
• 😚 To avoid losing benefits, it is recommended to carefully consider taking early benefits if planning to work before reaching full retirement age.
• ✋ Delaying benefits can result in a higher payout when individuals officially retire and start collecting Social Security.
• 💁 More information on Social Security can be found on fool.com or through the provided link to Dan's special report.

Questions & Answers

Q: How can people lose Social Security benefits if they work?

If individuals claim early Social Security benefits and continue working, they risk losing some benefits if their wages exceed certain limits. The amount of benefits lost depends on the income earned above the limit.

Q: Does the reduction of benefits also affect family members claiming benefits?

Yes, the reduction can also apply to family members claiming benefits. Both the earnings of the worker and the work history of the family member can trigger the benefit limit. It can even impact a family member when the original Social Security recipient is unaffected.

Q: What steps can individuals take to avoid losing their Social Security benefits?

To avoid losing benefits, it is advisable to consider working after reaching full retirement age or delaying taking early benefits. Delaying benefits allows for a higher payout when individuals finally retire and begin collecting Social Security.

Q: Is there additional information available on Social Security?

More information on Social Security can be found on fool.com or by accessing Dan's special report through the provided link in the video.

Summary & Key Takeaways

• If individuals decide to take early Social Security benefits while continuing to work before reaching full retirement age, they may lose some of their benefits if their total wages exceed a certain limit.

• The wage limit for 62-65-year-olds is $15,120, and they lose one dollar in benefits for every two dollars earned above that limit.

• If turning 66 in the current year, there is a higher wage limit of around $40,000, with a reduction of one dollar in benefits for every three dollars earned above that limit.