Grandparents And Granddaughter Walking On Winter BeachOne option for many retirees to boost their income is to take on a part-time or seasonal job. But if you’ve retired and claimed your Social Security benefits before reaching full retirement age (age 65 to 67, depending on your year of birth), working part time may affect the amount of your monthly checks.

Like anything else with Social Security, the administration sets particular rules governing this situation.

If you’re less than your full retirement age…
• If you earn $15,720 or less per year, your Social Security checks won’t be affected
• For every two dollars you earn above $15,720, Social Security will deduct one dollar from your monthly check

In the year you reach full retirement age…
• Social Security will deduct one dollar from your monthly checks for every three dollars you earn above a certain limit
• For 2015, the limit will be $41,880
• The Social Security administration only counts earnings before the month that you reach full retirement age

Once you have reached full retirement age…
• Your earnings no longer reduce your benefits, no matter how much you earn

It’s a good idea to keep this information in mind if you plan to work after claiming your Social Security benefits. Typically, we are all conditioned to believe that it’s best to work as hard as we can and earn as much money as possible. But this may not be the case once you reach retirement and claim your Social Security benefits. If working beyond the income limits will reduce your benefits checks, you will have to perform some careful calculations to see if your part-time job is worth the hit to your overall income. In many cases, it might be a better idea to slightly reduce your work hours and adjust your budget.

Talk to your financial advisor or Social Security representative before making any drastic decisions that will affect your work life or budget.

14226 – 2015/3/10