Having to retire might be one of the biggest decisions or choices a person has to make. but the question that remains is, is social security enough to sustain a great living? Your income amount and revenue actually depends on your retirement age, but even if you wait until you get full retirement, some people might find that the income is not enough and choose to work part-time jobs or full time-jobs for seniors to make extra income. How much money can you earn while on social security?
What is social security?
Social security, if you’ve never heard of it, which I doubt since you’re reading this, is the foundation of economic security for more than millions of disabled & retired people, and families of disabled, deceased and retired works.
More than 60 million Americans benefit from it while more than 160 million actually pay its taxes, which means, that on four families, only one receives social security.
To benefit from social security you’ll need to have paid its taxes into the program every time you receive your paycheck which in turn, once you reach your full retirement age will flow back as monthly income, so it’s a pay-as-you-go-program.
So are you allowed to work while you’re on social security?
Well, technically yes, you’re allowed to work while you’re on social security but there are some rules about how much you’ll be able to earn if you haven’t reached full age retirement.
As of 2019, a lot has changed including income limits, and now even if you choose early retirement the youngest age at which you’ll get one is 62.
How much money can you earn while on social security
As we’ve said before the amount you’ll be earning actually depends on what age you retire so here we’ve got three-case scenarios:
After full retirement age: starting the month of your full retirement age, which varies depending on your birth year, for people that were born after 1954, the retirement age varies between 66 or 67, and for people who’re turning 62 in 2019, their retirement age is 66 years and 6 months. So once you reach the retirement age that’s been specified for your case you can make any money you want without your social security being reduced, so there’s no limit of income what so ever once you’re on your full retirement age, but keep in mind, that even though you’re benefiting for social security, you’ll still be paying its taxes from your earnings.
Under full retirement age for a year: if you haven’t reached your full retirement age then this is where it gets tricky because you’ve got limitations on how much you earn, so if you make less than $17,640 then you’re safe and under the radar, but for every $2 you make above this, then $1 is deducted from your benefit payment.
- Here’s an example so you can understand more: If your retirement age is until 2020, and you decide to retire in 2019 and get paid $1800 for your job, then your annual income would be of $21,600 which is $3960 higher than $17,640. So if you receive social security of $2500, in this case, $1980 would be deducted yearly of your payment, which means that you will receive $2335 monthly of your social security benefit.
Under full retirement age for part of a year: if your full retirement is due to the same year, then you have the possibility to earn up to $46,920 without any reduction in the few months left for you to reach full retirement age, but once you exceed that amount you’ll be facing a reduction of $1 on every $3. Just like before, the amount will be deducted off your social security income until you reach full age.
- If you apply the same example as before, you wouldn’t have exceeded the specified amount, but the moment you win $3 more each month, $1 will be deducted of your social security income.
Calculate your social security retirement age:
If you still don’t know in which age you’ll be able to retire then you can simply visit the social security administration’s website, search for their retirement age calculator and determine it without any hassle or trouble.
Maximum Taxable Earnings
Each time you get paid, your income has social security taxes deducted from it, but how much exactly is enough?
Over the years the maximum of amount of taxable kept changing and increasing, and for 2019, the amount’s been determined to be $132,900.
So if you’ve got more than one job, social security taxes get withheld from both of them without any regards to the other, so if you find out that the amount that’s been withheld exceeds the maximum, you can ask of the IRS of those social security taxes to give you back a refund of the exceeded amount.
Are those reduction lost?
Reductions caused by the earnings test aren’t lost, this is a common misconception that everyone has, sometimes you can pay an overdue amount and when that happens, social security will pay you back the amount you owe them the following year.
And all of those reductions you’ll pay over the course of months or years, will all be worth it since the moment you receive your social security income you’ll notice that it increased. Why? Well, because it’s been recalculated.
So as a recapitulation, reductions are not lost, they’re saved to your social security income for both cases and once you reach 66/67 depending on your case, your social security income will be recalculated and you’ll receive the amount you’re due, plus no deduction will be made once you reach that age so you’ll have no limitation on your income just like the first case scenario.
But what if you’re disabled?
Social security administration pay disability benefits under two programs:
You’ve got social security disability insurance that will pay benefits for you and some certain family members f you paid social security taxes and worked long enough.
You’ve supplemental security income that helps disabled adults and children benefit from it if they have limited resources.
Do you wish to work while applying to the disabled program? Then don’t be so sure of being accepted, If you are working in 2019 and you get paid more or so $1,220 a month, the social security administration will not consider you disabled.
If you decide to continue working (under $1220 a month) while receiving social security benefits for disabled then you might get lucky and qualify for unlimited earnings and full social security benefits after a trial period that lasts up to 9 months.
After this period doesn’t be surprised if you get re-evaluated to decide if you still qualify for disability benefits and others.
You can find out more about earning limits for disability benefits by looking at the social security administration’s official website or by calling them on their number to find out if you’ll qualify for disability benefits.
So, now you know how much you’ll be earning while o social security and what amounts you can’t exceed if you haven’t reached full retirement age, or if you’re disabled, if you’ve got any other information to add you can leave them in the comments, or if you’re looking for more information then the official site of social security administration will answer you.
