All financial programs are important, but Social Security benefits play an important role in preventing poverty in old age and are paid out at critical stages in a worker’s life. With that in mind, it’s worth understanding when you start receiving your monthly payments and how continuing to work while collecting Social Security will affect your benefits.
As the Social Security Administration (SSA) points out, it’s perfectly fine to work full-time and collect Social Security benefits when you reach the qualifying age of 62. Whether this should be done under normal circumstances is another question entirely.
With few exceptions, just about every financial guru will tell you to wait as long as possible to start collecting your Social Security benefits. If you apply for Social Security before you reach full retirement age (66 or 67, depending on whether you were born before or after 1960), and your income exceeds established SSA income limits, your benefits will be reduced.
Work and collect Social Security
The SSA deducts $1 for every $2 earned over the $19,560 limit, so you’ll deduct $2,180 from your Social Security benefits.
To use the SSA example in their publication How Work Affects Your Benefits, if your monthly social security payment at age 62 is $600 ($7,200/year) and your goal is to earn $23,920 for the year , you will get a payment of $4,360 of income withheld over the $19,560 limit.
However, you get that money back once you reach full retirement age. Your benefit can then be recalculated and your monthly benefit increased for the extra income.
You can track your benefits using the SSA’s online platform, mySocialSecurity.