Working while on Social Security
Good afternoon. I started taking social security at age 62. I was recently offered a job but the pay would put me over my monthly earnings limit. What payroll deductions can I take to reduce that earnings amount?
Terry Says
It’s always a mistake to take SS early, before full retirement age, unless you are really desperate!
Here’s what Social Security says:
If you are younger than full retirement age and earn more than the yearly earnings limit, we may reduce your benefit amount. If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2021, that limit is $18,960.
But remember, that earnings limit does not consider income from rentals, dividends, or other retirement income — only income from work. Here’s what they say:
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you’re self-employed. We include bonuses, commissions, and vacation pay. We don’t count pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits.
So the real question is whether “wages” can be adjusted for retirement plan contributions on a pre-tax basis?!! I searched the sS website but couldn’t fine a more precise definition of countable income for benefit reductions.
