Q & A
Can I receive Social Security and continue to work?
Complete Question: I just turned 65 years old and went to file for Social Security and Medicare at the same time. I’m still working, but don’t have health insurance through my employer. When I called the Social Security office, they told me that since I work, I won’t get a Social Security benefit. I only make about $23,000 per year, which is why I wanted to go ahead and file in the first place. I know a lot of people who work and get Social Security, so what’s the problem?
Answer: You can work and get Social Security at the same time; however, when you are younger than full retirement age (FRA), which is currently 66, there is an annual earnings limit. In 2015, if you are 65 or younger, the limit is $15,720. If you make more than the limit, your benefit will be reduced – so you will still get a benefit, just not the full benefit. The calculation for the reduction is $1 for every $2 you earn over the limit. So for you, that is about $3,640. Since you are starting mid-year, that will be pro-rated based on when your benefits start (i.e. if you start in July, you will have a reduction of $1,820). The good news is that since you will be full retirement age next year, the limit dramatically increases. For 2015, the limit for the year you reach FRA is $41,880. Although the 2016 limit is not yet known, based on history, it will likely be slightly higher than that amount. Since you make $23,000 per year, you will not be affected by the limit next year. Furthermore, the law does not have an earnings limit for people after they reach their full retirement age so you will not have to worry about it after you turn 66 years old, regardless of how much money you make.
On a side note, regardless of what you decide to do with your Social Security, if you are not getting health insurance through your employer, you should still sign up for Medicare since you are 65. You can choose to sign up for Medicare and Social Security at the same time or at different times – you are not required to sign up for both at the same time.