Q & A
Does my benefit amount change if I work after taking Social Security?
Complete Question: I already started taking my Social Security benefits but decided I should go back into the workforce. I was told that if I earn more now than I used to my benefit could actually increase. I really don’t expect that to happen since I’m just working in a low-level part-time job. Is it possible that my current earnings will lower my average income and result in a lower benefit?
Answer: It is true that if someone earns more money now than they used to they could get a higher benefit, even if they already filed for Social Security. This is because your benefit is based on your average income in your highest 35 years of earnings, which is called Average Indexed Monthly Earnings (AIME). Every year Social Security will recalculate your average to see if your benefit amount should be increased. Don’t worry, though…since your benefit is based on your largest income-earning years, there is no way that a lower income will decrease your benefit. The worst thing that would happen is that your benefit would remain the same.
Keep in mind, however, that I am only talking about your base benefit amount and not reductions due to earning income that is more than the annual earnings limit – that is a different issue. The annual earnings limit applies if you have income over a certain amount before you reach full retirement age. If your income is over the earnings limit, your benefit will be reduced; however, this is unrelated to your AIME.