Can you work and collect social security at age 65? This question is a common concern for many individuals approaching retirement age. The answer is not straightforward, as it depends on various factors including individual circumstances, employment status, and the specific regulations of the social security system in question. In this article, we will explore the complexities surrounding this issue and provide valuable insights to help you make informed decisions about your retirement plans.
Firstly, it’s important to understand that social security benefits are designed to provide financial support to individuals once they reach a certain age. In the United States, for example, the full retirement age (FRA) is currently 66, but it gradually increases to 67 for those born in 1960 or later. This means that individuals can start receiving social security benefits as early as age 62, but the monthly payments will be reduced if they choose to retire before reaching their FRA.
When it comes to working and collecting social security at age 65, there are a few key considerations. If you are still employed and earn income, your social security benefits may be affected. For those who have reached their FRA, earnings above a certain threshold may reduce their monthly benefits. In 2021, this threshold is $18,920 for individuals born in 1955 or earlier, and $19,560 for those born in 1956 or later. However, once you reach your FRA, any earnings will no longer affect your benefits.
On the other hand, if you continue working after reaching your FRA, you can still collect your full social security benefits without any reduction. This means that you can enjoy the financial stability of your retirement income while also contributing to your career or passion. However, it’s important to note that if you are employed by a private employer, your income may still affect your benefits if you are under the age of 70, as your employer’s contribution to social security will be based on your earnings.
Additionally, if you choose to work part-time or start a new business after reaching age 65, it’s crucial to understand the tax implications. Self-employment income may be subject to self-employment tax, which is a combination of social security and Medicare taxes. This tax is based on your net earnings from self-employment, and it can impact the amount of social security benefits you receive.
In conclusion, the question of whether you can work and collect social security at age 65 is a nuanced one. While it is possible to do so, it’s important to consider the potential impact on your benefits, earnings, and taxes. Consulting with a financial advisor or social security expert can help you navigate the complexities and make the best decisions for your retirement plans. Remember, the key is to find a balance between enjoying your post-retirement lifestyle and ensuring financial security for the future.
