For Mark Roberts’ Use: While we all have an ideal retirement scenario in our imaginations, sometimes people do claim their Social Security benefits earlier than originally planned. Maybe you need to semi-retire a bit early, or your income from work has decreased. Perhaps you planned for an early retirement, but afterward realize that you would prefer a bit more income, so you go back to work. Whatever the reason, many people who receive Social Security do continue to work at least part-time.

Working during retirement can actually be a great idea. Work keeps us active, provides social contact, and prevents boredom. And, of course, there is the added benefit of a little extra income. But did you know that that income can affect your Social Security benefits? In fact, if you make “too much” money, in some cases part of your benefits checks will be withheld.

How does this happen? The first thing you need to know is that this rule does not affect all Social Security beneficiaries. Those who have reached their “full retirement age”, as defined by Social Security, can earn as much money as they want and their benefits will not be affected. We are specifically talking about those who claimed their benefits earlier than their full retirement age, and have yet to reach that age.

If you fall into that category, then one dollar of your Social Security benefits will be withheld for every two dollars that you earn about a certain threshold. Currently that limit is $16,920 annually, although it is adjusted upward from time to time.

That sounds like bad news, and it could be, if you were depending on receiving your full benefits while continuing to work. However, that money is not lost forever. Once you reach full retirement age, your benefits will be recalculated to include the withheld amounts.

Retirement planning is a complicated topic, and we don’t want issues like this one to take you by surprise. So, please schedule regular appointments with us as you prepare for retirement. We can help you anticipate and hopefully avoid any unpleasant surprises.