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Income Limits When I Collect Social Security Benefits

written by: Stephanie Mojica•edited by: Elizabeth Wistrom•updated: 4/29/2010

"What are my income limits when I collect Social Security benefits?" This is a common question, especially as people near retirement or consider applying for disability. Learn more about the basics of Social Security income here.

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    Overview

    You might be nearing retirement age, or considering a Social Security disability claim. You might be considering issues like how much credit card debt you can pay off and whether your personal spending plan might drastically change once your start receiving Social Security benefits.

    "What are my Income limits when I collect Social Security benefits" is a legitimate question; some retirees and disabled people would like to work at least part-time. Part-time work can enhance your emotional and physical health and also improve your financial security. However, before running to the workforce be sure to learn all you can about how this might impact your monthly Social Security check. Also, learning about asset limitations is important; some forms of Social Security such as Supplement Security Income (SSI) depend at least partially upon whether or not you have excessive assets such as stocks, property, or savings accounts.

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    The Basics of Working and Retirement Benefits

    If your birthdate is between January 2, 1943 and January 1, 1955, then your full retirement age is 66, according to the Social Security Administration website. If you work and are of legal retirement age, you can keep all of your Social Security retirement benefits no matter how much money you make. This is great news for people who meet those guidelines; perhaps you might even consider starting your own company or working as a consultant for a major corporation in your field of expertise.

    But the rules aren't quite so easy if you start receiving retirement benefits at an earlier age like 62. You can earn up to $37,680 without losing any of your benefits, according to the Social Security Administration. But if you earn more, the Social Security Administration will seize $1 of your check for every $3 you earn beyond that income limit. So if you earned $45,000 in a year and weren't full retirement age, then you will likely lose $2,440 in benefits. This is usually taken at once, not over multiple checks; so if you were receiving $600 a month in retirement benefits you will likely not have any check at all for four months in the following tax year. The good news is once you reach full retirement age, potential benefit cuts would not apply to your case no matter how much money you earn.

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    Working and Disability

    Income limits when collecting Social Security benefits especially apply to those who are not of retirement age and receive disability benefits. In some cases, the Social Security Administration will issue benefits to people of a younger age who can prove disabilities that prohibit ordinary work. If you have a disability, you may be able to work sometimes but not all of the time. However, be really careful about how much you earn; you can easily lose your checks and any insurance programs for which you are approved.

    In some cases, you may be approved for a "trial work period" during which you can earn unlimited income without an adverse impact to your benefits. But remember if you earn too much money, you might be declared ineligible for disability in your caseworker's review.

    If you earn more than $1,000 in a month, you generally have earned too much and may be considered ineligible for disability. However, blind people can earn up to $1,640 a month and still receive their disability checks.

    Bottom line - instead of wondering, "What are my income limits when I collect Social Security benefits," do some research. As with every other aspect of planning for retirement, understanding your options is a necessary component.

    Bottom line - instead of wondering "What are my

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    References

    "Social Security Online: Earnings Limit to Receive Social Security Disability Benefits." http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_adp.php?p_faqid=317

    "Social Security Online: Effects of Working While Receiving Retirement Benefits." http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_adp.php?p_faqid=236

    "Social Security Online: How Work Affects Your Benefits." http://www.socialsecurity.gov/pubs/10069.html

    "Social Security Online: Supplement Security Income (SSI)." http://www.ssa.gov/pubs/11000.html