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SSA site confuses me about taking early retirement and keep working because of record high inflation

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Contributor

SSA site confuses me about taking early retirement and keep working because of record high inflation

Hi and thank you. My full retirement age is 66ys 10mo. I would like to take early retirement benefits around August 2023 when I'm past 64s of age. I plan to keep working full time making Federal adjusted income of $76K /taxable Federal income of $57K a year. Estimated early retirement with out working is $1895mo. at this time. How and what would my adjusted benefit be calculated with the valuables factored in?

Contributor

Kevin...Being in a similar situation of turning 64 soon and wanting to keep working while drawing SS early here is what I am being told for this year and moving forward until Full Retirement Age.  Once you pull the trigger anything over $1770 a month will be subject to the $1 penalty for $2 earned.  So if you are earning $6333 a month you will have a liability of $2281 per month ($6333 - $1770 = $4563 / 2 = $2281) withheld come January 2024.  So, if your SS income is $1895 and your penalty is $2281 monthly I don't see how you would be able to receive any money until you reduce your income or hit Full Retirement Age.

 

BTW...I am also told that any monies withheld due to excessive income over the allowance will be paid back over 12 to 13 years once you hit FRA.  This came from an accountant.....I am not making this stuff up.

 

If this info is not accurate please jump in folks with your knowledge so we can all learn.  

 

Tom

Bronze Conversationalist

@TomA227701 The accountant is correct. I am providing a link to a SS Pamphlet the explains how SS recalculates your SS Benefit once you attain Full Retirement Age (FRA). https://www.ssa.gov/pubs/EN-05-10069.pdf Please note that you do not receive the accumulated amount that has been withheld. In the Pamphlet, $910 was the SS benefit that was withheld from age 62 to age 67 or 60 months or $54,600 ($910 X 60). At FRA (age 67), the 30% reduction factor is removed and the SS Benefit is paid at 100% or $1,300 per month. This is the repayment. So, it would take about 140 months (about 12 years) to recoup the $54,600 loss ($54,600 divided by $390/month). If you are evaluating based on the time value of money (i.e., future value at 3%), it will be closer to 13 years to recoup the loss. SS will not pay you $54,600 retroactively. Hope this helps.

Contributor

Hey Tom, you are correct. I actually spoke with someone on the SSA 1877 phone number. You can retire early, and at working income (Gross) he said the $70K I would make would pay me no benefits at all until I reach full retirement age. Then there would be no limitation. I was hoping to tap some of my benefits to help through this record high inflation. Wish SS was invested in a 401K instead!

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