I am self employed, so if I take my SS now at 64 and start to generate income
I understand they could suspend or reduce my benefits. How will they know
what I am earning before I file my taxes and submit my 1099? If it is
suspended based on earning do i have to repay what was withdrawn?

Also if the benefits are suspended because I start earning again and if I am
able to go to 70 before retaking my benefits how will they calculate it? Will
it be my original benefit or will it continue to grow as I be contributing
again?

Thank you for your help! I really appreciate it.

Hi,

When you file your application, you will be asked to estimate how much you will earn for the year. Social Security will then pay or suspend your benefits based on your estimate. You are also expected to amend your estimate if you later determine that you have overestimated or underestimated your earnings.

After your tax return for the year is filed, your actual earnings will be compared with your estimate. If you earned more than your estimate, you will likely be overpaid and will be expected to repay the overage. If you up end earning less than your estimate, any excess withholding will be refunded to you.

If you file for benefits prior to your full retirement age (FRA), your benefit rate will be reduced based on the number of months that you start prior to FRA. Your benefit rate could then be adjusted effective with your FRA to permanently reduce your benefit rate only for the months prior to FRA that you were actually paid. Then if you voluntarily suspend your benefits between FRA and age 70, your adjusted benefit rate will be increased by 2/3rds of 1% for each month of voluntary suspension.

For example, say Julie starts her benefits at age 64. Julie's full retirement age is 66 and her full retirement rate (PIA) would be $2000, but her reduced age 64 rate is $1733. That reduction rate is based on the presumption that Julie will be paid 24 months of benefits prior to FRA, but let's say Julie ends up being paid for only 12 of those months due to her earnings. In that case Social Security would raise Julie's benefit rate to $1866 effective at FRA. If Julie then voluntarily suspends her benefits from FRA until age 70, her adjusted FRA rate of $1866 would be increased by 32% (i.e. 48 months x 2/3rds of 1%), raising her rate to $2463.

Before deciding when to start drawing your benefits, you should strongly consider using our software to explore and compare all of your various options so that you can make the best possible choice.

Best, Jerry