How Does A Government Pension Affect My Social Security Benefits?
The social security benefits one is entitled to largely depend on the age at which they retire, number of years they have worked and their total earnings. The full retirement age for each individual is based on their year of birth. For instance, as of 2011, the full retirement age of people born between January 1st, 1943 and January 1st, 1955 is 66 years. If someone born on December 20th, 1953 continues working until the year 2013, they will have attained their full retirement age. In this case, they will receive full benefits. Their earnings will not affect their benefits in whatever way.
Earnings for Younger People
Social Security puts a limit to how much one can earn and still enjoy s ocial security benefits if they are below their full retirement age. For earnings above $14,160, Social Security deducts $1 out of every $2 received. For instance, if you made $20,000, you would have excess earnings worth $5840. Social Security would therefore keep $2920 of this amount.
Older People who are About to Reach Full Retirement Age
If your full retirement age falls within the course of the year, Social Security pegs the earnings at $37,680. For every $3 you earn above this amount, Social Security deducts $1. The deduction stops on the month you attain full retirement age. Basically if you were born on May 10th, your retirement age will come full blossom on the same date. Once you reach your full retirement age, there is no limit to how much you can earn.
The annual social security benefits depend on how much your monthly benefits are and the total amount of money you get per month. For example, if you earn $15,000 a month and have month social security benefits of $900; your annual social security benefits will be $10,380.