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Be Careful if You Go Back to Work After Starting Social Security - Motley Fool
It’s a trap that many an unsuspecting Social Security beneficiary has fallen into – the so-called Social Security “earnings test.” Many Americans simply don’t understand the rules, especially those that relate to working while collecting Social Security benefits, and that lack of understanding could mean a pretty unpleasant surprise in the form of an Overpayment Notice from Social Security. The “earnings test” applies to anyone who is collecting benefits before reaching full retirement age, and it limits how much can be earned before Social Security takes away some benefits. The earnings limit changes every year, but for 2023 the limit is $21,240. If that is exceeded, Social Security will take away benefits equal to $1 for every $2 over the limit, typically by requiring it be paid back, either in a lump sum or by withholding future benefits. The topic of working while collects early benefits can get tricky, for example the limit goes up by about 2.5 times in the year full retirement age is reached. And, you will get some of that money back after you reach your full retirement age. But if inflation means you’re considering a return to the workforce and you haven’t yet reached your SS full retirement age, it’s important to read this Motley Fool article by Maurie Backman.
Also, if you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. Learn more about it here…