South Florida Sun-Sentinel Palm Beach (Sunday)
Starting and stopping Social Security retirement benefits
Q: Because of the pandemic, I retired last year at age 62 and filed for Social Security retirement benefits. But with inflation on the rise and the stock market outlook uncertain, I think I should go back to work. What sort of impact would that have on my benefits?
A: Depending on how much you earn, your Social Security benefits could be reduced by what’s known as the earnings test, which is adjusted every year.
In 2022, you’ll forfeit $1 in benefits for every $2 you earn over $19,560. In the year you reach full retirement age, you’ll lose $1 for every $3 you earn over $51,960. Once you reach full retirement age, you can earn as much as you want without having your benefits reduced.
Fortunately, benefits reduced by the earnings test aren’t lost forever. Once you reach full retirement age, the Social Security Administration will boost your monthly check to make up for the amount that was withheld.
For example, if you started taking benefits at age 62, your full retirement age is 66 and you lost 12 months’ worth of benefits to the earnings test. Social Security will then adjust your monthly payout as though you had started benefits three years early instead of four.
But if you want to avoid this scenario, you may be able to request a do-over.
During the first 12 months of claiming benefits, you can withdraw your application. You will have to repay all of the benefits you’ve received, along with any spousal benefits.
But when you restart benefits, you’ll receive a larger amount, just as you would have if you had delayed filing in the first place.
If it has been more than 12 months since you filed for Social Security, you can’t withdraw your application and restart benefits at a later date. Once you reach full retirement age, though, you can suspend benefits until age 70 (or earlier). This will enable you to earn delayed-retirement credits of 8% a year.
“This can add up to tens of thousands of dollars for many people,” says William Meyer, chief executive of Social Security Solutions.