Another social security question

[Rukh O'Rorke]

I've heard various stories of people claiming SS at 62 but continuing to work - do you pay FICA on the additional earned income and does your payment go up each year with it?

Or does claiming SS trigger something - and then your income is FICA taxed differently? And your payment is not affected?

Is there an earning threshold where it makes sense to take SS or not take it? How do you determine this?

[tskeeter]

If you continue to work after starting to draw SS, FICA will be withheld from your compensation. 

Your post “retirement” earnings are a factor when your future SS benefits are calculated.  Over time, your post “retirement” earnings will increase your benefits.

If you claim SS benefits before your full retirement age and you continue to work, you may be subject to limitations on your earnings.  If you earn more than $17,640 a year, your SS benefits will be reduced by $1 for every $2 you earn.

Once you reach full retirement age, your SS benefits will not be reduced regardless of how much you earn.

[Rukh O'Rorke]

thanks! good info!

[tallguy]

Jan 19, 2020 12:55:00 GMT -5 tskeeter said:

If you continue to work after starting to draw SS, FICA will be withheld from your compensation. 

Your post “retirement” earnings are a factor when your future SS benefits are calculated.  Over time, your post “retirement” earnings will increase your benefits.

If you claim SS benefits before your full retirement age and you continue to work, you may be subject to limitations on your earnings.  If you earn more than $17,640 a year, your SS benefits will be reduced by $1 for every $2 you earn.

Once you reach full retirement age, your SS benefits will not be reduced regardless of how much you earn.

Probably true for most people, but if those earnings are not among the 35-highest years on which benefits are based they may not affect benefits at all.

[tskeeter]

Jan 19, 2020 13:04:04 GMT -5 tallguy said:

Jan 19, 2020 12:55:00 GMT -5 tskeeter said:

If you continue to work after starting to draw SS, FICA will be withheld from your compensation. 

Your post “retirement” earnings are a factor when your future SS benefits are calculated.  Over time, your post “retirement” earnings will increase your benefits.

If you claim SS benefits before your full retirement age and you continue to work, you may be subject to limitations on your earnings.  If you earn more than $17,640 a year, your SS benefits will be reduced by $1 for every $2 you earn.

Once you reach full retirement age, your SS benefits will not be reduced regardless of how much you earn.

Probably true for most people, but if those earnings are not among the 35-highest years on which benefits are based they may not affect benefits at all.

Good point.