There is a difference between deciding when to retire from working and deciding when to claim your Social Security benefits. For the former, you should consult with a certified financial advisor, but I’ll provide you with how Social Security fits into your personal circumstances. In deciding when to claim Social Security, you should look at your financial needs, your life expectancy, your work status, and your marital status. There is no one formula right for everyone because everyone’s circumstances are different, but here are some things to help decide what is right for you:
• Social Security has an “earnings test” which applies to anyone who collects Social Security before reaching their full retirement age (FRA). Your FRA is 66 years and 8 months, and that is the point at which you get 100% of the SS benefit earned from a lifetime of working. If you collect SS before your FRA and continue to work, there is a limit to how much you can earn without jeopardizing your benefits. For example, the earnings limit for 2023 is $21,240 and, if that is exceeded, SS will take away benefits equal to $1 for every $2 you are over the limit. They “take away” benefits by withholding future payments until they recover the penalty for exceeding the limit. If your earnings are substantially over the limit, you will be ineligible to collect Social Security until either your earnings are less, or you reach your FRA.
