Ask Terry Questions Coming out of retirement impact on Social Security

Coming out of retirement impact on Social Security

By Terry Savage on July 07, 2024 | Financial Planning / Retirement

Dear Terry,
I heard you talk about coming out of retirement. You said two things. You have one year to do so and you have to pay back that SS. Can you elaborate on that? My husband retired almost a year ago. His birth month is 7/24. He currently has an opportunity to work part time or full time. If he comes out of retirement does he only have one year? What happens if it is longer? What does it mean when you say pay back? If he takes full time does that mean we have to payback his $1900 dollars a month he received?and if so how? This decision has to be made soon. Thank you for your time.

Terry Says

Wait, wait, wait.  I said that if you took SS early, and decide you would have been better off waiting, you can change your mind within one year of getting SS — and you must pay back everything you received.

But your husband can certainly work and earn extra money.  If he is below the SS Full Retirement Age, his benefit will be reduced $1 for every $2 he earns, except in the year he reaches full retirement age, in which case the reduction is smaller. BUT there is a factor in the ultimate formula that will basically give him that reduction back into his check down the road.

So bottom line, he can work and collect Social Security.  (I do!!)  And if he earns enough he will have to pay taxes on the income plus a portion of his SS benefit (not to exceed 85%).   But money is money –and if he enjoys work and like getting  a paycheck, this should not discourage him from going back to work!

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