Today’s Social Security column addresses questions about the whether working before filing can incur the earnings test, full retirement age for survivor’s benefits versus retirement benefits and more about widow’s benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.
Will Working Before My Social Security Retirement Benefit Cause Deductions?
Hi Larry, I will be 66 and four months in April. Will I loose money by working in the four months before I start collecting? Thanks, Chuck
Hi Chuck, Just to be clear, there is no limit on how much you can earn starting with the month you reach full retirement age (FRA). So if you reach FRA in April 2023 and if you start drawing your benefits that month, you won’t lose any of your benefits no matter how much you earn before or after that month.
The only way you’d need to be concerned about the amount you earn prior to FRA is if you want to start drawing your benefits before FRA. Benefits before FRA can be subject to withholding if you earn more than the earnings test exempt amount. The earnings test exempt amount for people reaching FRA in 2022 is $51,960, but only earnings in months prior to the month in which a person reaches FRA count toward that limit. The 2022 exempt amount for people who are under FRA throughout 2022 is $19,560.
The earnings test exempt amounts for 2023 is $56,520, but it won’t matter in your case unless you want to start drawing your benefits prior to the month you reach FRA. You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Is FRA For Widow’s Benefits Different Than FRA For SS?
Hi Larry, Is FRA for widow’s benefits different from FRA for retirement benefits? I believe I read on the SSA web site that for someone born in 1955, FRA for widow’s benefits is 66 and for retirement benefits is 66 and two months. Is this correct? Thanks, Julie
Hi Julie, Yes, but only for widow’s born in the years 1940 through 1961. The full retirement age (FRA) for widow(er)’s benefits for people born in those years is either two or four months earlier than their FRA for Social Security retirement benefits.
Note however that even if a person’s FRA for widow(er)’s benefits is earlier than FRA for retirement benefits, their FRA for retirement benefits is controlling for purposes of Social Security’s earnings test. So even if a person has reached FRA for widow(er) benefits, there would still be a limit on the amount they could earn and collect widower’s benefits until the month that they reach their FRA for retirement benefits. Best, Larry
Is There A Difference Between A Widow’s Benefit And Survivor Benefits?
Hello,I will be 60 in March and I will be filing for benefits. Is there a difference between widow’s benefit and survivors benefits? Thanks, Stacy
Hi Stacy, Widow’s benefits are simply one category of Social Security survivor benefits. Other types of survivor benefits include child benefits, parent’s benefits, child in care mother’s and father’s benefits, etc. Each type of survivor benefits has different eligibility requirements, and each type of survivor benefits has it’s own rules for calculating benefit rates. Best, Larry