How much money can I make while receiving social security? This is a common question among individuals who are currently collecting social security benefits. Understanding the rules and limitations of earning while on social security is crucial for making informed financial decisions. In this article, we will explore the guidelines set by the Social Security Administration (SSA) to help you determine how much you can earn without risking your benefits.
The SSA has established specific rules regarding the amount of income you can earn while receiving social security benefits. These rules vary depending on your age and the type of social security benefits you are receiving. Here’s a breakdown of the key factors to consider:
1. Full Retirement Age (FRA): If you are collecting social security benefits before reaching your full retirement age, which is typically between 66 and 67, there are strict income limits. For individuals who reach FRA, there are no income limits, but earnings over a certain amount may be subject to taxation.
2. Earnings Limit: If you are under FRA, the SSA imposes an earnings limit. For 2021, the limit is $18,960. If you earn more than this amount, $1 will be deducted from your social security benefits for every $2 you earn above the limit. This deduction continues until you reach FRA, at which point the deduction stops.
3. Early Retirement: If you choose to collect social security benefits before reaching FRA, the earnings limit is reduced. For 2021, the limit is $16,920. The deduction rate remains the same – $1 for every $2 earned above the limit.
4. Annual Earnings Test: After reaching FRA, there is no earnings limit. However, if you earn more than a certain amount, your social security benefits may be taxed. For 2021, the taxable portion of your benefits begins when your combined income (including half of your social security benefits, plus all other income) exceeds $25,000 for married couples filing jointly or $17,500 for single filers.
It’s important to note that these rules can change from year to year, so it’s essential to stay informed about the latest guidelines. Additionally, if you are considering returning to work while receiving social security benefits, it’s advisable to consult with a financial advisor or the SSA to ensure you are making the best decisions for your financial future.
In conclusion, the amount of money you can make while receiving social security depends on several factors, including your age, the type of benefits you are collecting, and your overall income. By understanding these guidelines and staying informed, you can make informed decisions about your financial well-being.
