Decisions About Your Wealth

Working and Yet Retired
By: Larry G. Jones-SSA Public Affairs Specialist

The massive Oklahoma and national baby boom generation is staring retirement right in the face and that’s a scary thought. Who would ever have thought that baby boomers and retirement could actually be spoken in the same sentence. This is the generation of the Beatles, Woodstock, antiwar demonstrations and about every other discretion known to man. The fact is, the oldest of the boomers will officially turn 62 in January, 2008.

Unlike prior generations, the lines between working and retirement are much grayer (no pun intended) than they were for boomer parents and grandparents.

Because of poor saving and even poorer spending habits, it may be that boomers will continue working even though that wouldn’t be the first choice. Sadly, this generation has been the poorest saving generation in recent memory.

A growing number of retirees are including work — either full or part-time — in their retirement lifestyle. Some of these retirees work because they need the income; others work because they find it helps them to stay physically and mentally active. Whatever their reasons for working, all retirees need to understand the relationship between working and their Social Security benefits ... including when to let Social Security know about their earnings. Here are a few brief reminders if you or someone you know is a “semi-retired” beneficiary.

For workers who are ‘full retirement age’ or older

If you work and are full retirement age or older, you may keep all of your benefits, no matter how much you earn. The full retirement age for workers born in the years 1943 through 1954 will be 66 years of age, and then gradually rise to age 67 for people born in 1960 or later. You can find out exactly what your full retirement age is by visiting our website at www.socialsecurity.gov/pubs/ageincrease.htm and typing in your year of birth.

For workers who are between age 62 and full retirement age

The earliest you can apply for Social Security retirement benefits is age 62. And if you are younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you are younger than full retirement age during all of 2007, we must deduct $1 from your benefits for each $2 you earned above $12,960. And we do not count pensions, savings or investment income toward these threshold amounts – only wages or self-employment income.

If you reach full retirement age during 2007, we must deduct $1 from your benefit payment for each $3 you earn above $34,400, until the month that you reach your full retirement age. Because we adjust the amount of your Social Security benefits based on what you have told us you would earn this year.  It is important to let us know if you think your earnings for 2007 will be different than what you originally told us.  If other family members get benefits based on your work, your earnings after you start getting retirement benefits could reduce their benefits, too. However, if your spouse and children get benefits as family members, their earnings affect only their own benefits.

It’s important to note that if a retiree’s earnings cause benefits to be withheld before they reach full retirement age, Social Security will increase that retiree’s monthly benefit amount starting at full retirement age. This will also increase the benefit amount paid to his or her survivors.

For more information about Social Security retirement benefits and working, read the pamphlet, How Work Affects Your Benefits. You can find a copy online at www.socialsecurity.gov/pubs/10069.html.

Larry Jones is a public affairs specialist with Social Security in Oklahoma City. To schedule a presentation for your group, contact him at larry.jones@ssa.gov.