Working and Receiving Social Security Benefits: How to Make it Work

Working While Receiving Social Security - The New rules Personalized Social Security Report: How Social Security Benefits are Taxed Financial Fast Lane ...(read more)

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Social Security benefits are a lifeline for millions of American seniors who are retired or disabled. However, many seniors are finding that they still have to work in order to make ends meet. Working while receiving Social Security is possible, but it can be tricky to navigate. Here are a few things to keep in mind: - Social Security has income limits. If you are under full retirement age (which is 66 for those born between 1943 and 1954, and gradually increasing to age 67 for those born in 1960 or later), you will have your benefits reduced if you earn more than a certain amount. In 2021, that amount is $18,960. If you earn more than this amount, Social Security will deduct $1 from your benefits for every $2 you earn over the limit. In the year you reach full retirement age, your benefits will be reduced by $1 for every $3 you earn over a higher limit ($50,520 in 2021). Once you reach full retirement age, there is no limit to your earnings. - Your benefits may be taxed. If you earn enough income from working and other sources (such as investment income), you may have to pay federal income tax on a portion of your Social Security benefits. There is a formula that determines how much of your benefits are taxable, based on your income. For most people, no more than 85% of their benefits are subject to tax. However, if you are married and file a joint tax return, and your combined income is more than $44,000, up to 85% of your benefits may be subject to tax. - Working can affect your Medicare premiums. If you are enrolled in Medicare, your premiums are based on your income. If you earn more than a certain amount ($88,000 for individuals or $176,000 for married couples filing jointly), you will pay higher premiums for both Medicare Part B (which covers doctor visits and other outpatient services) and Medicare Part D (which covers prescription drugs). This is known as the Income-Related Monthly Adjustment Amount (IRMAA). IRMAA is based on the income you reported on your tax return from two years ago. For example, in 2021, your IRMAA will be based on your income from 2019. Despite these complications, working while receiving Social Security can be a good option for seniors who want or need to keep working. Not only does it provide extra income, but it can also keep you engaged and active. Here are a few tips for making it work: - Be aware of the income limits and plan accordingly. If you know you will earn more than the limit, try to spread your income out over the year so you don't have a single high-earning month that will trigger a benefit reduction. You may also want to consider reducing your work hours or finding a lower-paying job that doesn't trigger the reduction. - Consider the tax implications. If you think you may owe taxes on your benefits, make sure you set aside enough money to pay them. You may also want to consult with a tax professional to determine the best way to minimize your tax bill. - Keep track of your earnings. You will need to report your earnings to Social Security each year so they can adjust your benefits accordingly. Make sure you keep accurate records of your earnings, including any self-employment income or tips. - Don't forget about Medicare. If you are working and enrolled in Medicare, make sure you understand how your work income will affect your premiums. You may want to consider delaying enrollment in Medicare Part B (which has a premium) if you have employer-based health insurance that is comparable. Working while receiving Social Security can be a bit complicated, but with some careful planning and record-keeping, it is possible to do successfully. If you have questions or concerns about working and Social Security, consider reaching out to a financial advisor or Social Security representative for guidance. https://inflationprotection.org/working-and-receiving-social-security-benefits-how-to-make-it-work/?feed_id=90203&_unique_id=6443747d77512 #Inflation #Retirement #GoldIRA #Wealth #Investing #drawingsocialsecurityat62andstillworking #retirementplanning #socialsecurityandworkinginretirement #socialsecuritybenefits #socialsecuritybenefitsatage62 #socialsecurityearningslimit #socialsecurityearningslimit2023 #socialsecurityincreasefor2023 #takingsocialsecurityat62andstillworking #workinganddrawingsocialsecurity #workinganddrawingsocialsecurityat62 #workingandsocialsecurity #workingwhilecollectingsocialsecurity #SpousalIRA #drawingsocialsecurityat62andstillworking #retirementplanning #socialsecurityandworkinginretirement #socialsecuritybenefits #socialsecuritybenefitsatage62 #socialsecurityearningslimit #socialsecurityearningslimit2023 #socialsecurityincreasefor2023 #takingsocialsecurityat62andstillworking #workinganddrawingsocialsecurity #workinganddrawingsocialsecurityat62 #workingandsocialsecurity #workingwhilecollectingsocialsecurity