Working While Collecting Social Security: How Much Will You Lose?

About 70 percent of people who responded to a survey by the Employee Benefit Research Institute in 2012 said they plan to work at least some, after retirement, so this is a question on a lot of people’s minds. If you are just planning on earning a little extra income, you may not lose a single dollar.

Here’s what you can expect for 2013.

• If you are under your full retirement age: You can earn gross wages of $15,120 without losing a single dollar in benefits. Once you’ve earned that much, you will lose $1 for every $2 you earn above $15,120. So let’s say you earn $16,120. That’s $1,000 above the limit so you will lose $500 in benefits.
  
  
• In the year you reach full retirement age: This gets a little tricky. Before the month you turn full retirement age, you can earn up to $40,080 before you lose any benefits. If you earn more than that before you have your birthday, you will lose $1 in benefits for every $3 you earn over the limit.
  
  Let’s say your birthday is September 15th, when you will turn full retirement age. By the end of August you earned $40,680, which is $600 over the limit. You will lose $200 in benefits. But the following month, even before your birthday, you will lose no benefits because you turn full retirement age.
  
  
• In the month you reach full retirement age: Your earnings have no effect on your benefits.

Note: the answer to how much you will lose in benefits depends on a combination of factors, so to be certain, go online and use the benefits calculator available at ssa.gov. Be sure to check the box that asks if this is the first year you become entitled to benefits.

Drawing Benefit’s on Your Spouse/Ex-Spouse’s Record

Did you know you may be able to draw Social Security on your spouse’s record instead of your own?

Marc Kiner, Social Security expert with Premier Social Security Consulting LLC says if the circumstances are right, you may be able to tap into your spouse’s benefits and draw higher benefits. You can do this if:

1. You are both at least age 62.
2. Your spouse is receiving Social Security retirement benefits or is full retirement age and has filed and then suspended benefits.

Note: There is an exception to this. If you are caring for your spouse’s minor child under age 16, or a disabled adult child, you can collect on your spouse’s record regardless of your age. If you draw on your spouse’s record the spouse’s benefits are not affected.

If you are divorced, you may be able to draw on your ex-spouse’s Social Security record, if:

1. You are single.
2. You and your ex-spouse are both at least age 62.
3. You were married 10 years or more.
4. Your ex-spouse is receiving Social Security now, or has reached full retirement age, has filed, and then suspended benefits.

Note: If you collect divorced spouse benefits, your ex-spouse’s benefits are not affected. If at some point you remarry, you will no longer be able to collect divorced spouse benefits.

Denied Social Security Disability? Should You Appeal?

It is your right to appeal, and you should know about half of these appeals succeed, so you have a 50/50 chance of winning. But the process is not easy. You have to follow the steps precisely and be patient. You can ask your attorney, your elder care adviser, or another professional to represent you in this appeal.

There are four levels of appeal.

1. A reconsideration is a complete review of your case, by an individual who was not involved in the original decision. Generally you do not even need to be there unless you wish to attend.
2. If after a reconsideration you disagree with the outcome, you can ask for a hearing. You’ll be able to present new evidence to an administrative law judge, who was not involved in the first decision. Unless the judge requires it, you do not need to attend, but it’s a good idea for you to be there.
3. If you disagree with the hearing decision, you can ask the Social Security Appeals Council to review your case. If the Council agrees that the hearing decision was incorrect, it may review your case itself, or send it back to the administrative law judge.
4. The last step is to file a lawsuit in federal district court if you disagree with the Appeals Council.

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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