Social Security was designed to provide for the retirement year. However, many seniors elect to augment their government allocated provisions with a part-time job. While this is understandable, even laudable in this day and age, it pays to realize that in some cases provisos limit the amount of money they can earn.
Although legal retirement age is 65, or 67 starting with those born in 1938, many people start collecting their legally entitled social security benefits earlier at age 62. Often they are still working. In such event, there is a penalty attached to the earnings accrued, even though it is permissible to continue to earn monies through employment, even while receiving one’s social security benefits. Once the legal retirement age is met, however, there is no penalty attached to the earnings of senior’s who elect to continue working.
Those seniors working while receiving Social Security are deducted one dollar for every two earned above 14,150 dollars. However, this annual deduction decreases during the year that the worker reaches their legal retirement age. During the year the worker reaches legal retirement age he is deducted one dollar for every three earned above 37,689, up until his birthday. Seniors need to realize their Social Security benefits will be withheld until all deductions are properly calculated and withdrawn. Therefore, they should monitor the amount of work they do before reaching legal retirement age very carefully, adjusting their work schedules and withholding allowances accordingly. Seniors should also verify their correct age of retirement and the month it goes into effect with the proper government office.