When Can I Start Keeping All Of My Benefits And Still Work Full Time?

Jan 5 2020 - 9:52am

My birth date is Sept. 15, 1956 and I am collecting SS but working full time. That means that they are withholding about 6 or 7 months of benefits because I'm over the earning threshold. The year I reach full retirement I would not have to have anything withheld because the earning limit is more then i would earn anyway. But my question is; when can I start keeping all the benefits and still work full time ? If I was born on August 31st 1956 I would reach full retirement age at the very end of 2022 which (it seems) means that I wouldn't have to have anything withheld starting on January 1, 2022. If this is determined (strictly on) the calendar year then I have to wait all the way to January 15, 2023 to start earning my full pay as well as to receive all my SS without penalty. Is that really how it works ? For the sake of 2 weeks I miss out on all those payments ! Somehow that doesn't seem right. Is there any chance that the actual date I can receive both would be Jan. 15, 2022 or whatever date gets me to the year of 66 and 4 months ? I think I've asked the question in an understandable way so I hope it makes sense. Thanks PK

Hi PK,

Since you were born in September 1956, your full retirement age (FRA) for Social Security earnings test purposes is 66 & 4 months. Therefore, January 2023 is the first month that you could be paid benefits without regard to how much you earn.

If you had been born in August 1956 then your FRA would be December 2022. In that case, for the first 11 months of 2022 $1 of your benefits would be subject to withholding for every $3 of earnings in excess of the earnings test exempt amount applicable for people who reach FRA in that calendar year. The exempt amount for people reaching FRA in 2020 is $48,600, but that amount is adjusted annually. Obviously, though, this doesn't apply to you since you weren't born in August 1956.

Because you will be below FRA throughout the calendar year of 2022, $1 of your benefits will need to be withheld for each $2 that your earnings exceed the earnings test exempt amount applicable for people who are below FRA throughout that year. That exempt amount is set at $18,240 for 2020, but will likely be somewhat higher by the year 2022.

If it's any consolation, your benefit rate will be adjusted after you reach FRA to give you credit for the months that your benefits are withheld due to the earnings test. Over time, that increase in your monthly rate should allow you to recoup the benefits you lost to the earnings test if you live at least an average life span.

Best, Jerry