Deciding when to claim Social Security can be confusing but, rather than actually analyzing options, a majority of beneficiaries claim at the earliest age of 62. Then, some years after collecting reduced Social Security benefits because they claimed early, it’s fairly normal to second-guess that decision to not wait longer to claim a higher amount. Some, however, don’t understand that the decision on when to claim is permanent, and believe that they are saving Social Security money because they claimed early. Thus, they believe, they should be entitled to an increase after a certain number of years. Such is the case with this beneficiary who wrote lamenting that his SS benefit doesn’t eventually increase after a while because they’re saved Social Security money. Only problem is, this writer didn’t correctly do his math – at age 75, he has still collected more Social Security by claiming at 62 than he would have if he had waited until his full retirement age to claim. All of this is explained in this Encored version of a past Ask Rusty article. See Rusty’s written response at this link or listen to Rusty’s response here.
If I choose to collect benefits at the age of 62, will result in a permanent reduction in my monthly payment compared to if waited until my full retirement age (FRA).
Michael
Yes, if you start your benefits at 62, you will take approximately a 30% cut to your benefit amount. It is a permanent reduction and does not increase at your FRA. If you are planning on continuing to work, you will also be subject to an earnings limit. The earnings limit for 2025 is $$23,400. If you go over that limit, Social Security withholds one dollar for every two dollars you go over.
If you have further questions, please email ssadvisory@amacfoundation.org or call 888-750-2622.
Sharon L Kleczka
Social Security Advisor
AMAC Foundation
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, or the Social Security Administration.
I am currently working, I am a teacher, if I retire at the end of school, I will still get my summer checks, If I started drawing my SS lets say in August but I received a check for August does that count against how much I make? When does the $24,530 start?
Robert
The annual earnings limit for 2025 is $23,400, and it begins in January, regardless of when you start your benefits. If your summer checks are considered bonuses, they may qualify as special payments, meaning they won’t affect your earnings limit. I recommend you have proof of when you last worked, such as your final paycheck stub showing the last day of employment, or a letter from the school showing the date you retired. Social Security goes by the date the income was earned not received.
If you will already be over the annual limit when you retire, you have the option to use the monthly limit for the months you receive benefits. Using this method Social Security does not count your earnings for when you weren’t receiving benefits. The monthly limit for 2025 is $1,950. You can not go over the monthly limit by so much as $1 or they will want that payment back. If you use the annual limit they withhold $1 for every $2 you go over. The 2026 earnings limit will be released sometime in October or November.
If you have further questions, please email ssadvisory@amacfoundation.org or call 888-750-2622.
Sharon L Kleczka
Social Security Advisor
AMAC Foundation
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government.