Does The Money I Earn In Months Before I Retire At 62 Reduce My Social Security Check

Have you exceeded the yearly Social Security earnings limit? Or think y'all might?

Don't worry.

I know from personal experience that returning the money to Social Security is painless and efficient. And I'm going to explain exactly how it works.

Only first, I'll give you some background data.

Rebel Retiree began collecting benefits at 62. So in the second quarter of 2018, he started working part-time. He anticipated he might go over the almanac earnings limit by the end of that year.

What he didn't know, nevertheless, was how long the job would final, or if he would quit earlier e'er reaching the earnings limit.

With that in mind, instead of notifying Social Security in accelerate, he decided to play it past ear, go with the flow, and allow everything fall into identify on its ain.

By the stop of the year, at that place was no doubt his earnings exceeded the annual allowable limit. The following Jan, his W2s confirmed it.

At that time, we weren't exactly certain how it would be resolved.

I know there tin be a certain corporeality of apprehension when faced with something unfamiliar, especially when dealing with bureaucratic agencies like the Social Security Administration.

And although Social Security's website is readily available for the states to pull up on our devices and very thorough in its explanations, there are many rules and regulations to digest.

And sometimes it can exist overwhelming, if not disruptive.

Because we've had experience with this situation, I decided to write this article. I hope you lot find it useful.

SS 2020 Earnings Limit Graphic - Rebel Retirement

Help! I've exceeded the Social Security earnings limit.

If you lot're afraid the Social Security Administration volition punish y'all for exceeding the earnings limit, you are not alone.

At that place are countless other baby boomers in this situation.

In light of that, yous may find this story interesting. A question popped up on a Facebook group that I follow. The grouping is for retirees or those wanting to retire.

A group member had taken early Social Security benefits before full retirement age. She was working and had exceeded the yearly earnings limit. She wanted to know what happens if you work and brand more than the commanded limit.

After contacting her local Social Security office, she plant herself more than confused than ever earlier and decided to attain out to the group.

The woman wanted to know if anyone in the group had personal experience with this type of situation.

She worried nearly:

Penalties
How to return the money
Practice you pay them back direct
Do yous need to write a check to the Social Security Administration
When will benefits resume after SSA withholds the over payments

A few people replied.

Someone recommended that she rethink her situation and suspend her benefits until her total retirement historic period
Some other quoted the Social Security Assistants
People shared links to confusing articles

People tried to be helpful, while others treated her similar she had made a mistake.

I could tell from reading her replies, that their answers were unsatisfactory.

I knew that I could help and explained my experience to her.

From the reply she left me, I'm confident that she received the data that she needed.

At present, to particular what happens if you work, collect social security benefits, and earn over the annual earnings limit.

It'south not every bit complicated every bit yous may think.

What to do if y'all earn more the Social Security earnings limit?

Permit me say that the Social Security Administration volition only contact you by official mail through the United States Postal Service. Unless you initiate phone communication, they will never phone call y'all. Having said that, delight understand that all of the examples I share come up from communications by mail.

You don't take to do anything in advance if y'all work while collecting benefits and expect to exceed the annual earnings limit.

Yes, the Social Security Administration wants you to advise them in advance. Notwithstanding, that isn't ever practical for diverse reasons. Y'all will not be penalized or pay extra for waiting until you are certain how your particular circumstances develop.

When Social Security receives your W2s and tax returns, they will evaluate your account and make adjustments appropriately.

RR Exceeding Earnings Limit Timeline-Rebel Retirement

Personal experience exceeding the annual Social Security earnings limit.

Approximately 6 months after filing our articulation tax render for 2018 which claimed earnings from Rebel Retiree's part-time task, he received a letter of the alphabet from the Social Security Administration.

The letter explained that piece of work and earnings caused a change in his benefit corporeality. Information technology thoroughly explained the amount of overpayment. And it showed the corporeality that must be repaid to Social Security.

Information technology stated that 10 amount of dollars from the September 2019 payment would exist withheld in October to recover the overpayment.

As in all tax-related judgments, the letter of the alphabet informed Rebel Retiree of his correct to appeal. It also stated his right to asking a waiver if:

The overpayment was not his fault in any way
He could non encounter living expenses if they recovered the overpayment
If recovery would be unfair for some other reason

All of the figures were authentic and he had no reason to entreatment.

Nosotros did non pay out of pocket in advance but merely waited for benefits to be withheld.

The overpayment in benefits was satisfied, and regular Social Security benefits returned the following calendar month.

The Social Security Administration is efficient.

Don't allow the fear of making more than the almanac earnings limit end you lot from working and claiming your Social Security benefits at the aforementioned time.

There are perks to doing so.

As long as yous go along to work and collect benefits, the Social Security Administration volition cheque your records annually to see whether your additional earnings will increase your benefit corporeality.

Yes, that's correct. As long as you lot put in, your benefits could increment.

Nevertheless, Social Security has the formula to determine this. And it all depends on your highest-earning years. And so, it doesn't necessarily mean that your benefit corporeality will increase, just it's possible. It's all based on your lifetime contributions. And you all-time know your circumstances regarding that.

If there is an increment, they volition mail you lot a alphabetic character telling you of the new benefit amount.

Additionally, when you reach your full retirement age, they volition recalculate your benefit corporeality and give you lot credit for whatsoever months you didn't receive a payment because of earnings!

Determination

Exceeding the Social Security yearly earnings limit while working can be worrisome – especially if you aren't familiar with the process. Still, the SSA is very efficient in how it handles any overpayment of claims.

You are not charged a penalty
You lot practise non have to write any checks to Social Security to pay them back unless you want to
Benefits resume the month after they withhold benefits due to overpayment
After you reach total retirement historic period, they recalculate your do good corporeality to give you credit for whatever months in which you did not receive a do good because of your earnings.