You can receive Social Security benefits while still working

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If you’re thinking about working as long as possible to increase your retirement savings, you may be wondering whether you can receive Social Security retirement benefits while you’re still employed. The answer is yes. But depending on your age, earnings from work may affect the amount of your benefits.

If you begin taking your benefits when you are younger than full retirement age, and you make more than the annual earnings limit ($17,040 in 2018), part of your benefits will be withheld, reducing the amount you receive from Social Security. If you’re under full retirement age for the entire year, $1 is deducted from your benefits for every $2 you earn above the annual limit.

In the year you reach full retirement age, $1 is deducted from your benefits for every $3 you earn above a different limit ($45,360 in 2018).

Starting with the month you reach full retirement age, your benefits won’t be reduced, no matter how much you earn.

Earnings that count toward these limits are wages from a job or net earnings from self-employment. Pensions, annuities, investment income, interest and veterans or other government benefits do not count. Employee contributions to a pension or a retirement plan do count if the amount is included in your gross wages.

The Social Security Administration (SSA) may begin to withhold the required amount, up to your whole monthly benefit, as soon as it determines that you are on track to surpass the annual limit. However, even if your benefits are reduced, you’ll receive a higher monthly benefit at full retirement age, because the SSA will recalculate your benefits and give you credit for any earnings withheld earlier. So the effect that working has on your benefits is only temporary, and your earnings may actually increase your benefits later.

These are just the basics, and other rules may apply. The Retirement Earnings Test Calculator, available at the Social Security website, ssa.gov, can help you estimate how earnings before full retirement age might affect your benefits.

BARBARA KENERSON is first vice president/Investments at Janney Montgomery Scott LLC and can be reached at BarbaraKenerson.com.

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