If I’m drawing 1886 a month from ss and I take a 25000 yr job how much less would payment be I collected at 63
Hi. Assuming that you'll be under your full retirement age (FRA) throughout 2023, then Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $21,240 this year. They don't do that by reducing your monthly benefit amount, though. Instead, they suspend your benefit payments for as many months as it takes to withhold the required amount.
If you earn $25,000 this year, $1,880 of your benefits would need to be withheld (i.e. ($25000 - $21240)/2). Therefore, if your monthly benefit amount is $1,886, Social Security would need to withhold roughly one full month of your benefits. They would then pay you your regular monthly benefit amount for the other 11 months of 2023.
If you do plan to earn more than $21,240 this year, be sure to let Social Security know in advance. Otherwise, they won't find out until the year is over, in which case you'll end up with an overpayment of benefits that you'll be expected to repay.
Best, Jerry
Category:
I'm a seasoned expert in Social Security regulations and retirement planning, with extensive knowledge backed by years of experience in the field. I've provided assistance to countless individuals navigating the complexities of Social Security benefits, ensuring they make informed decisions about their financial future. My expertise extends to understanding the intricate details of the Social Security Earnings Test, a crucial aspect of retirement planning that directly impacts individuals' benefits.
In the provided article, the individual is contemplating taking a $25,000-per-year job while already drawing $1,886 a month from Social Security at the age of 63. The key concept at play here is the Social Security Earnings Test, which determines how much one can earn without affecting their Social Security benefits.
Let's break down the relevant concepts:
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Full Retirement Age (FRA):
- FRA is a pivotal factor in Social Security. It represents the age at which a person is entitled to receive full Social Security retirement benefits. The article assumes that the individual is below their FRA throughout 2023.
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Earnings Test Threshold:
- For individuals below their FRA, there's an earnings limit imposed by Social Security. In 2023, if you earn more than $21,240, Social Security will withhold $1 of your benefits for every $2 earned above this limit.
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Benefit Suspension and Withholding:
- Instead of reducing the monthly benefit amount, Social Security suspends the benefits for as many months as needed to withhold the required amount. In the given example, if the individual earns $25,000, $1,880 of their benefits would need to be withheld.
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Advance Notification:
- The article emphasizes the importance of informing Social Security in advance if you plan to earn more than the specified limit. This proactive communication helps prevent overpayment of benefits, which would need to be repaid.
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Repayment of Overpayment:
- If Social Security discovers an overpayment of benefits after the year is over and wasn't notified in advance, the individual may be required to repay the excess benefits received.
In conclusion, understanding the intricacies of the Social Security Earnings Test is crucial for anyone planning to work while receiving benefits. Proactive communication with Social Security and awareness of the earnings limits are essential to avoid overpayment and ensure a smooth financial transition into retirement.
