What Happens To Your Social Security At Retirement When You Are Still Earning Money?

What happens if you are earning a significant amount of money (more than the limits) and you decide to go ahead and begin receiving your Social Security benefits at Full Retirement Age (FRA)?

Since you’re already at FRA, you have no limit on your earnings, either as an employee or as a self-employed individual.  Your earnings have no negative impact on your Social Security retirement benefit, although if your earnings are significant and more than some of your earlier earnings years, your future benefits could possibly increase.

In addition, any benefits that your dependents or spouse may be receiving that are based upon your record are also not impacted by your earnings.

The Impact

The one impact that your additional earnings will have on your Social Security benefit is that taxation will be increased according to the amount of income you receive.  This can amount to as much as 85% of your Social Security benefit being taxed.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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