Can You Still Work Full-Time After 65 & Collect Social Security Benefits?

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Social Security bases benefits on your work history, not your present income or your personal wealth. Individuals who have amassed a fortune collect Social Security, along with those who need Social Security benefits to pay for food. Early retirement has a penalty for earned income, but once you reach full retirement age, you can collect Social Security and earn any amount of income. Full retirement age has changed from 65 to 66 or 67 for retirees in 2011.

Full Retirement Age

Social Security uses full retirement age to calculate 100 percent of your benefit amount. For individuals born in 1942 or earlier, full retirement age is 65. Individuals born from 1943 to 1954 reach full retirement age at 66. Persons born after 1960 reach full retirement age at 67, and a birth date between 1955 and 1959 increases the full retirement age two months for every year. An individual born in 1955 reaches full retirement age at 66 years and 2 months; 1956 is 66 years and 4 months.

Early Retirement

You can take Social Security retirement as early as age 62. If you take Social Security retirement prior to your full retirement age, you incur penalties for your earned income if you earn in excess of $14,160. The penalty for every $2 you earn in excess of $14,160 is $1. Social Security withholds your monthly checks to cover the penalty. The year you reach full retirement age, the calculations change. You may earn $37,680 that year without penalty. A penalty of $1 for every $3 you earn applies to that year you reach full retirement age. If you are 65 and reach full retirement age at 66, this may be the applicable calculation.

Full-Time Employment

The month you reach full retirement age, all penalties for earned income end. You can earn any amount, have any amount of money in the bank and collect your Social Security retirement benefits under the 2011 regulations. You can wait until age 70 to collect your Social Security retirement and the monthly amount increases to about 130 percent of your full retirement age benefit. If your earnings after you retire are one of your highest years, Social Security recalculates your benefit. Once you reach age 70, Social Security does not add to your benefit.

Working After Full Retirement Age

If you choose to work and collect Social Security retirement, your combined income determines if you pay federal income taxes on your Social Security in 2011. Combined income is the total of your nontaxable interest, adjusted gross income and 50 percent of your annual Social Security retirement. If this total exceeds $25,000 and you are single, or $32,000 and you are married, you pay federal income taxes on part of your Social Security. The Internal Revenue Service taxes 50 percent of Social Security retirement benefits between $25,000 and $34,000 combined income for singles and between $32,000 and $44,000 for married couples filing a joint tax return. The IRS taxes 85 percent of Social Security benefits above $34,000 combined income for singles and above $44,000 for married couples in 2011.


About the Author

Linda Richard has been a legal writer and antiques appraiser for more than 25 years, and has been writing online for more than 12 years. Richard holds a bachelor's degree in English and business administration. She has operated a small business for more than 20 years. She and her husband enjoy remodeling old houses and are currently working on a 1970s home.

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