Not everyone who retires gives up working. Some retirees take on part-time work or eventually find new full-time jobs. You may work after retirement to supplement your income, because you see a job as a productive way to fill time, or you may decide to embark on a new career entirely. You can earn income from a job and draw Social Security at the same time. Depending on how much you make, you may continue to collect your full Social Security benefit while you work.
Before Full Retirement Age
You may be able to collect part of your Social Security benefits as early as age 62, but your full retirement age won't arrive until you're 65 or older, depending on the year you were born. If you collect Social Security before your full retirement age and also work, the Social Security Administration reduces your benefits by $1 for every $2 in wages you earn above an annual limit. The annual limit for 2011 was $14,160. This benefit reduction only applies to money you earn from wages, or net self-employment income. There's no limit to the amount you can earn from interest or investments.
The Year You Reach Full Retirement Age
In the year you reach your full retirement age, the Social Security Administration handles things differently. For the months prior to your birthday, your benefit will be reduced by $1 for every $3 in wages you earn over a set annual limit. In 2011 the limit you may earn in the year you reach full retirement age is $37,680. Once you pass your birthday and reach your full retirement age, you'll receive your full benefit payment, regardless of money you earn from working.
After Full Retirement Age
Once you reach your full retirement age, the money you earn from employment doesn't reduce your monthly benefit payment, no matter how much you earn. You'll continue to pay Social Security taxes on the money you earn, but your benefit won't be reduced. If you were born after 1943 your retirement age is 66 or more. People born in 1960 or later reach full retirement at 67.
Work and Your Benefit Amount
Working during your retirement can lead to a higher benefit payment later. The Social Security Administration refigures benefits every year based on earnings to that date. If you earn substantial money during your retirement years from working either part- or full-time, this may mean you'll receive a larger Social Security benefit payment as a result. Also, if you work before full retirement and this results in a reduction in your benefit payments during that time, you'll receive a large payment once you reach full retirement to make up the difference. You don't lose out later just because your job resulted in a benefit reduction prior to full retirement.
Cynthia Myers is the author of numerous novels and her nonfiction work has appeared in publications ranging from "Historic Traveler" to "Texas Highways" to "Medical Practice Management." She has a degree in economics from Sam Houston State University.