Q & A
If I take early retirement and still work, will my benefits continue to be reduced because I retired at age 62?
Answer: Social Security will review the age 62 reduction factor when a person reaches full retirement age. At that time, we will determine if there is any month a benefit was not paid because of earnings that exceeded the annual earnings test amount. We remove those month(s) from the reduction factor calculation. Then, we pay the higher benefit for the month the person attained full retirement age and for all subsequent months.
Here is how this works. Suppose you apply for benefits at age 62, but continue to work. Before reaching full retirement age, you do not receive benefits for 12 months because your earnings were more than the annual work limit. When you attain full retirement age, Social Security will credit the reduction factor for those 12 months back to you. This means your benefit amount will be recalculated and adjusted upward. This way your benefit amount is calculated only on the actual number of months that you received early benefits.
Source: mySanAntonio.com – January 19, 2014