Ask Rusty — Will my work earnings affect my Social Security benefits?

Published 7:34 am Saturday, January 14, 2023

Dear Rusty: I am presently 67 years of age and am still working full time. I am receiving Medicare coverage, but I have not yet applied for monthly Social Security payments. I have been told that I can take SS payments even if I am still working. Is that correct? Is there a limit to how much I can earn each year and still receive SS payments? Signed: Working but Wondering

Dear Working: Social Security’s so-called “earnings test” applies only to those who haven’t yet reached their full retirement age. At 67 years of age, you are already past your SS full retirement age (FRA) of 66 years and 2 months, which means there is no longer a limit to how much you can earn from working. Regardless of how much you earn, your monthly Social Security benefits will not be affected, so you can claim your Social Security at any time and not worry about your benefits being affected. 

You should also know that because you haven’t yet claimed your Social Security, your monthly benefit has been growing since you reached your full retirement age in October of 2021. You’ve been earning Delayed Retirement Credits (DRCs) at the rate of .667% more benefit for each month you have delayed claiming, so your benefit now at 67 would be over 8% more than it would have been at your FRA last year. And, if you wish to, you can continue waiting to claim SS and continue to earn those DRCs to get a still higher benefit. But DRCs stop when you reach 70, when you would get your maximum Social Security benefit – about 31% more than your FRA amount – so never wait past age 70 to claim.

To recap: because you’ve already passed your full retirement age you can claim your SS benefit now (e.g., to start in January) and get a benefit which is 8+% more than you would have gotten if you claimed at your full retirement age, or you can continue to wait and get an even higher amount by claiming even later. Which way to go depends a lot on your current financial needs and your life expectancy. If you don’t urgently need the money now and are in good health and expect at least average longevity (about 84 for a man your current age), then waiting longer to claim would be a smart move. But if you need (or want) the money now, then claiming at this time would also be a wise choice. In either case, you don’t need to worry about your earnings from work negatively affecting your monthly Social Security benefit – they won’t.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory)