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Claiming SS early? Beware of the “Earnings Test” - Yahoo! Finance
Claiming Social Security at any time after age 62, while continuing to work, can seem like a great way to enhance your monthly income and make life a bit more comfortable. After all, you’ve worked an entire career contributing to SS via payroll taxes and feel deserving of the SS money. But beware of a somewhat obscure Social Security rule called the “Annual Earnings Test” (AET), because the AET limits how much you can earn from work while collecting SS benefits before your SS full retirement age (FRA). The limits are fairly low ($24,480 this year; changes yearly), and if your earnings exceed that amount, Social Security will take away $1 in benefits for every $2 you are over the limit. That means you’ll need to repay SS half of any earnings over the annual limit, which will likely mean you won’t get your SS benefits for some or all 12 months of the year. The AET penalty changes during the year you attain full retirement age, and goes away entirely after you’ve reached FRA, but the penalty could come as a surprise and disrupt your income as well. All of this is explained in detail in this Yahoo! Finance article by Motley Fool’s Kailey Hagen.
Social Security is a complex topic. If you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security or enrollment in Medicare, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of these programs. All questions are answered quickly, at no charge. Learn more about it here…