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JULY 1, 2019

Can I still work if I'm claiming Social Security benefits?

Answered by
Ben Storey
Director, Retirement Thought Leadership, Bank of America
Yes, you can collect Social Security benefits and work in retirement at the same time. But if you're working and collecting benefits before you've reached full retirement age — which is between ages 66 and 67, depending on the year of your birth — your monthly benefits may be subject to a reduction if your income exceeds a prescribed limit.
However, you could eventually receive Social Security benefits withheld due to your income. For more, see the Social Security Administration page on the subject. After you reach full retirement age, your benefits will no longer be subject to any reduction while you're employed, and there is no limit on how much you can earn.

Here's how to calculate how your earnings impact your Social Security benefits:

  1. If you're under your full retirement age for the entire year, the government deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2020, that limit is $18,240.
  2. In the year you reach full retirement age, the government deducts $1 in benefits for every $3 you earn above a different limit. In 2020, the limit on your earnings is $48,600 but the government only counts earnings before the month you reach your full retirement age.
  3. Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
Can you work while on Social Security?
Yes, but depending on whether or not you've reached full retirement, you may see a reduction in benefits.
 Full Retirement Age
For every $2 earned above cut-off, deduct $1 from benefit
$18,240 Cut-off
Year of
 Full Retirement Age
For every $3 earned above cut-off, deduct $1 from benefit
$48,600 Cut-off
 Full Retirement Age
After full retirement, income limits are removed
No Cut-off
Full social
Keep in mind that the amount by which your Social Security benefit is reduced depends on the type of earnings you have. If you're self-employed, the government counts only your net earnings from that work. If you work for an employer, only your wages are included in Social Security calculations. Pensions, annuities, investments and other government benefits do not count as earnings while you work in retirement.

Will my Social Security benefits be taxed differently if I work?

Working while collecting Social Security can affect your taxable income. Taxes on Social Security retirement benefits are based on what is commonly referred to as your combined income, a figure the IRS calculates by adding up your adjusted gross income, any tax-free interest you may have earned, and 50% of your Social Security benefits. There are strategies that can help you minimize taxes on your Social Security benefits, although, these too can change based on your age.
Calculating your combined income
Your adjusted gross income
Any tax-exempt interest (including interest from municipal bonds — often a core component of retirement portfolios)
50% of your Social Security benefits, plus certain other adjustments for the year
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Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. Visit our Rollover IRA page or call a Merrill rollover specialist at 888.637.3343 for more information about your choices.
This material should be regarded as general information on Social Security considerations and is not intended to provide specific social security advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.

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