SOCIAL SECURITYHow Working After 62

Impacts Your Benefits

Even though 62 is the “most

prevalent age” for Americans to

apply for Social Security benefits…

…more than half of people aged

60 or older say they plan to work

in retirement.

What do 60 year

olds plan to do in

retirement?

Find part-

time work

16.6%

Work for

myself

6.1%

Work as

long as

possible,

31.2%

Stop

working

14.6%

Other

31.5%

Source: Federal Reserve, Report on the Economic

Well-Being of U.S. Households in 2013

This is ironic because working in

retirement can reduce your Social

Security benefits.

Fortunately, the good news is that

any money withheld from your

benefits will eventually make its

way back into your pocket.

Here’s how…

If you apply for benefits prior to full

retirement at 66 but continue

working, then the Social Security

Administration will lower your

monthly benefits depending on

how much you earn.

In 2015, the SSA will deduct $1

from your benefit payments for

every $2 you earn above $15,720.

So, if you earn $20,000 a year,

then your benefits will be reduced

by $2,140.

And if you earn $40,000 a year,

then your benefits will decline by

$12,140.

But it’s important to note that your

benefits aren’t lost forever.

Every month your benefits are

withheld results in a benefit

increase at full retirement.

For example, let’s assume you

apply for Social Security at 62

but then have 24 months’ worth

of benefits withheld due to

working before full retirement.

Upon reaching 66, the SSA will

recalculate your benefits to give

you credit for the two years of

forgone benefits.

This will raise your effective

retirement age for calculating

future benefits to 64.

And thereby increase the size of

your future checks by 12

percentage points relative to your

primary insurance amount.

75%80%

87%

93%

100%

108%

116%

124%

132%

62 63 64 65 66 67 68 69 70

Data Source: Social Security Administration

Social Security Benefits by Retirement AgePercent of Primary Insurance Amount

And, of course, who doesn’t need

more income in retirement?

This is why the retirement experts

at The Motley Fool were surprised

to learn about a handful of little-

known “Social Security secrets”

that can boost a retiree’s income

by as much as $60,000.

A MarketWatch reporter has even

estimated that if more Americans

knew about these loopholes, the

government would have to pay

an extra $10 billion every year in

benefit payments.

If this sounds too good to be true,

it isn’t.

To see how these loopholes could

increase your retirement income,

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