The Surprising Truth About Earning Unlimited Income on Social Security
If you are approaching retirement age and considering what your retirement income will be, you may have questions about Social Security benefits. One common question is at what age can you earn unlimited income on Social Security? This may surprise you, but the answer is actually quite simple.
At What Age Can You Earn Unlimited Income on Social Security?
The answer is that there is no age limit to earning income while receiving Social Security benefits. That's right - you can continue to earn as much money as you want while also collecting Social Security.
How Does This Work?
There is a catch, however. If you are under full retirement age (currently at age 66 or 67, depending on your birth year), your benefits may be reduced if you earn above a certain amount. The Social Security Administration calls this the earnings limit.
What is the Earnings Limit?
The earnings limit changes each year, but for 2021, it is $18,960. This means that if you are under full retirement age and earn more than $18,960 in a year, your benefits will be reduced by $1 for every $2 over the limit.
What Happens When You Reach Full Retirement Age?
Once you reach full retirement age, there is no earnings limit. You can earn as much as you want without any reduction in your Social Security benefits. In fact, once you reach full retirement age, your benefits may be adjusted upward based on your continued earnings.
Why is This Surprising?
Many people assume that Social Security benefits replace all of their pre-retirement income, but this is not necessarily the case. In fact, Social Security only replaces about 40% of an average worker's pre-retirement income.
Knowing that you can continue to work and earn as much as you want (once you reach full retirement age) while also collecting Social Security benefits can provide some peace of mind and flexibility in retirement planning.
How Can You Maximize Your Social Security Benefits?
While there is no age limit to earning income while receiving Social Security benefits, it is still important to maximize your benefits. Here are a few tips to help you do that:
- Delay claiming your benefits until age 70, if possible, to receive the highest benefit amount.
- Consider your other sources of retirement income and how they will affect your Social Security benefits.
- Understand the impact of taxes on your Social Security benefits.
- Consult with a financial advisor or planner who can help you create a retirement income plan that maximizes your Social Security benefits.
In conclusion, earning unlimited income while receiving Social Security benefits is possible once you reach full retirement age. Knowing this fact and planning accordingly can help you make the most of your retirement years.