Ask Larry: Will Working Part Time Before Filing Reduce My Social Security Benefit Rate?

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Today’s Social Security column addresses questions about whether reducing income before filing will reduce retirement benefit rates, the potential effects of pensions based on income not being taxed by Social Security and the potential after remarriage. There will be benefits available. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more ask larry answer here,

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Do you have your own Social Security questions that you want answered? Ask Larry about Social Security here,

Will Working Part Time Before Filing Lower My Social Security Benefit Rate?

Hi Larry, I just turned 62 and am not working right now. If I start working part-time and make significantly less money than what I was earning full-time, will this affect the amount of my current Social Security retirement benefit calculation.

I don’t plan on taking Social Security early, but I’ve heard that Social Security will recalculate your monthly retirement benefit payments if your earnings drop before taking it.

Is that right? thanks, tony

Hi Tony, You cannot reduce your Social Security retirement benefit rate by working part-time. Social Security retirement benefits are based on the average of an individual’s highest 35 years of Social Security covered pay-indexed income.

Any years of income that are not among a person’s highest 35 income years are simply disregarded when calculating their rate of return. So if you work part-time, you won’t reduce your final benefit rate, but you probably won’t increase your rate like it might if you continued to work full-time.

Might want to consider using my company’s software — max out my social security or maxify planner – To ensure that your family gets the highest lifetime benefit. Social Security calculators provided by other companies or nonprofits can give reasonable suggestions if they are designed with extreme care. Best, Larryu

Can Social Security Decrease My Spouse’s Benefits?

Hi Larry, My husband has worked in overseas oil fields for years. He rarely paid Social Security taxes because he worked for foreign companies. We invested and saved, knowing we wouldn’t have much Social Security.

Now that he’s retired at age 67, the Social Security Administration is asking us to provide his IRA and other savings information. They said they could deduct their retirement benefits completely. Is it allowed? thanks, lisa

Hi Lisa, There is an unexpected elimination provision (WEP) that can cause a person’s Social Security retirement benefit rate to decrease if they receive a pension based on their work and income that was not subject to Social Security taxes.

Payments received from defined contribution plans (eg, 401(k), 403(b), or 457 plans) based on non-covered employment may be treated as a pension for WEP purposes if the plan is the employer’s primary retirement plan. Is.

I can’t tell from the information in your question whether or not your spouse’s benefits will be affected by WEP, but even if WEP does reduce their benefit rate, it won’t eliminate it completely. WEP never reduces an individual’s benefit rate to zero. Best, Larryu

Can I get benefits on my current spouse’s Social Security record after a period of time?

Hi Larry, I’ve been married for 30 years and my husband passed away in 2015. I got married again in 2021. Can I get benefits after some time based on my current spouse’s social security amount? thanks, nicole

Hi Nicole, you may not be able to receive the full amount while your spouse was alive, but if your spouse is currently receiving his or her benefits, you may be able to qualify for spousal benefits. However, I don’t have enough information to know whether you would qualify.

You’ll need to be at least 62 years of age at origin to potentially be eligible for spousal benefits, and you may not be able to qualify until your marriage is at least It doesn’t take one year, unless you were eligible for widow’s benefits on your own. Marriage.

Also, if you are already collecting high retirement benefits on your own records or widow’s benefits based on your late spouse’s records, you cannot collect spousal benefits. Best, Larryu


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