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When should you apply for Social Security?

Working impacts benefits due to taxes
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Working impacts benefits due to taxes

If you continue to work, or go back to work, while claiming Social Security benefits, your benefits could be reduced, depending on how much money you make. These benefits are not lost forever, but deferred until you reach full retirement age.

"For people who are still working, or who may go back to work after claiming benefits, you need to realize that some or most of your benefit will be reduced, depending on how much money you're making," says Kay.

Here's how it works, according to the Social Security Administration:

  • If you start receiving benefits before your normal or full retirement age, which depends on when you were born, your monthly benefit is reduced by $1 for each $2 you earn above a certain amount ($14,160 in 2010).
  • If you start getting benefits in the year that you reach your full retirement age, your monthly benefit will be reduced by $1 for every $3 you earn above a certain amount ($37,680 in 2010).
  • If you wait to collect benefits until after you reach your full retirement age, you can continue to receive your benefits without reduction no matter how much you earn.

In addition, keep in mind that if your income exceeds a certain threshold, your Social Security benefits can be taxed.


 

 

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