Raleigh, NC – Many retirees find themselves returning to the workforce after experiencing the unexpected high costs of retirement. Not only can retirement leave individuals craving the structure and social interaction that a job provides, but it also has a sneaky way of being more expensive than anticipated. As a result, some retirees decide to reenter the workforce to drum up extra income and ward off the boredom that comes with having little to do during the day.
It’s important for retirees considering a return to work to understand how it could impact their Social Security benefits. Once retirees reach full retirement age, they can earn any amount of money without risking having some of their Social Security withheld. However, if they haven’t yet reached full retirement age, they’ll be subject to an earnings-test limit, and exceeding it could result in a temporary reduction in their monthly Social Security paycheck.
In 2024, the earnings-test limit is $22,320 for those who haven’t yet reached full retirement age. From there, they risk having $1 in Social Security benefits withheld per $2 of earnings. However, if retirees will be hitting full retirement age later in 2024, the limit is $59,520, with the risk of having $1 in Social Security benefits withheld per $3 of earnings.
Although income earned during retirement might count toward the calculation of one’s monthly Social Security benefit in a positive way, earning too much could result in a temporary reduction in one’s benefits. However, if retirees want to avoid the risk of having benefits withheld, they could consider joining the gig economy, where they might have more flexibility and control over their income.
Returning to work as a retiree can bring several benefits, such as the opportunity for additional income and social interaction. However, it’s crucial to be aware of how it might impact Social Security benefits in order to fully understand what to anticipate. If retirees find a job where they can set their own hours, they can intentionally stay below the earnings-test limit with relative ease so they’re able to continue receiving their full monthly Social Security check.