My DOB is 3/31/54. I took my early retirement a year and a half ago at age 62. I would like to go back to work full time and stop my social security...until age 66 where I will not have the wretched cap. I'm thinking January 1 , 2018 for this plan to stop and return full time.
Can I do this without penalty?
Any other suggestions?
Thank you very much for your time and assistance!
Hi,
The answer is basically yes, but you can't voluntarily suspend your benefits until you reach age 66. At that point you could choose to suspend your benefits in order to accrue delayed retirement credits (DRC), which would increase your benefit rate by 8% for every 12 months of non-payment between ages 66 & 70.
Until you reach age 66, your benefits could be involuntarily suspended due to Social Security's earnings test (https://www.ssa.gov/planners/retire/whileworking2.html). For example, if you earn more than $16,920 this year your benefits would be suspended for as long as it takes to withhold $1 of your benefits for each $2 that your earnings exceed $16,920. Thus, if you earn enough over the limit your benefits could be suspended for the entire calendar year.
The earnings test exempt amount for 2018 won't be announced until mid to late October 2017, but if you return to full time work next year and earn upwards of $65K for example, it's quite likely that all of your 2018 benefits would need to be withheld. If you earn less than that you may still be due benefits for part of the year depending on your monthly benefit rate. If you do plan to exceed the earnings test limit next year you need to give Social Security an estimate of your 2018 earnings as early in the year as possible in order to avoid getting overpaid.
There is no penalty involved with this process other than the suspension of your benefits. In fact, you could be rewarded with a higher monthly benefit rate in two ways. First, your full retirement age rate (PIA) could be increased if one or more of your future years of earnings are higher than the lowest of your previous high 35 earnings years used to calculate your current rate (https://www.ssa.gov/pubs/EN-05-10070.pdf). Secondly, after you reach age 66 your reduced benefit rate would be adjusted to remove the reduction applicable for any months that you aren't paid benefits as a result of the earnings test.
Best, Jerry
