Social Security beneficiaries who work while collecting their retirement benefits could be in trouble in 2023. The Social Security Administration will be changing the rules a bit when it comes to earned income. For this reason, if you applied for Early Retirement Age and are working to supplement this income, you may have to change your approach a bit. You should check very carefully what the new income limit is. In addition, the COLA also increases Social Security benefits. Thus, many retirees who are working at the same time may not need to work anymore.
As for the annual earnings limits, there are two different groups. The Social Security Administration divides into two very distinguishable groups. The only common characteristic in these two groups is having applied for Early Retirement Age. On the one hand, there is the group of early retirees who turn 67 next year, i.e., these retirees reach Full Retirement Age. On the other hand, there is the group of retirees who in 2023 will not reach 67 years of age.
The first of these aforementioned groups has a much larger benefit margin. Therefore, all retirees who reach age 67 in 2023 will be able to have a salary while collecting Social Security without any problems. The annual benefit is so high that it is very difficult to reach that threshold. On the other hand, retirees who have not yet reached Full Retirement Age could have problems in this regard. This is because the limit is much lower, as we will see below.
Earnings limits as a worker collecting Social Security
By next year 2023, retirees collecting Social Security can receive up to $21,240 per year as workers. If they do not reach this amount, they will not have to pay a single dollar of their retirement benefit. We are talking about retirees who will not reach age 67 in the coming year. Should they exceed the $21,240 threshold, the SSA will deduct $1 for every $2 they earn in excess.
To avoid any kind of problems with budgets and payments, it is good to ask for benefit if we need it. An advisor could assure us that we will not have any problems. It is true that we will have to pay their fees, but it can save us a surprise on more than one occasion.
On the other hand, retirees who do turn 67 in 2023 have a big advantage. The dollar limit they can earn while collecting Social Security is $56,520 a year. The limit, as can be seen, is much higher than the previous limit. However, the penalty is also better, with the Social Security Administration deducting $1 for every $3 over the earnings limit.
This can be beneficial for many Social Security users. Since the earning threshold is so high, it is normal that most users with a benefit who work at the same time will have no problems with this situation.
It doesn’t matter which of the two situations you are in. In this case, the important thing is to control the level of income we have so that our family economy can function without major problems. Collecting Social Security and a salary at the same time has limits and knowing them is key.