January 21, 2022

Will Working Part Time Before Applying Reduce My Social Security Benefit?

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

view more Ask Larry for answers here.

Do you have questions about social security that you would like to see answered? Ask Larry about Social Security here.

Will Working Part Time Before Applying Reduce My Social Security Benefit?

Hi Larry, I just turned 62 and am not currently working. If I start working part-time and earn significantly less money than I made full-time, that will affect the amount of my current Social Security retirement benefit calculation.

I don’t plan to take Social Security early, but I’ve heard that Social Security will recalculate your monthly retirement benefit if your earnings are reduced before you take it.

Is that correct? Thank you Tony

Hi Tony, You cannot reduce your Social Security retirement benefit by working part time. Social Security retirement benefits are based on an average of a person’s highest 35 years of Social Security-backed wage-indexed earnings.

Any years of earnings that don’t belong to a person’s top 35 earnings years are simply disregarded when calculating their payout percentage. So if you work part-time, you won’t lower your ultimate benefit percentage, but you probably won’t increase your rate as you would if you had continued to work full-time.

might consider using my company’s software — Maximize my social security or MaxiFi Planner — to ensure that your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits can make good suggestions if built with extreme care. Dear Larry

Can Social Security Take Away My Husband’s Benefits?

Hi Larry, My husband has worked in overseas oil fields for many 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 asks us for our IRA and other savings information. They said they might abolish his retirement benefit altogether. Is this allowed? Thank you, Lisa

Hi Lisa, There is a Windfall Elimination Provision (WEP) that can have someone’s Social Security retirement benefit reduced if they also receive a pension based on their work and earnings that were not subject to Social Security taxes.

Payments received from defined contribution plans (e.g. 401(k), 403(b) or 457 plans) based on unfunded employment may be considered a pension for WEP purposes if the plan is the employer’s primary pension plan .

I can’t tell from the information in your question whether or not your husband’s benefits are affected by the WEP, but even if the WEP lowers his benefit percentage, it won’t be wiped out entirely. The WEP never lowers a person’s benefit percentage to zero. Dear Larry

Can I get my benefits on my current spouse’s Social Security Register over time?

Hi Larry, I was married for 30 years and my husband died in 2015. I remarried in 2021. Can I get benefits over time based on my current spouse’s Social Security amount? Thank you Nicole

Hi Nicole, You cannot get the full amount from your husband while he is still alive, but you may be eligible for spousal support if your husband is currently receiving his benefit. However, I don’t have enough information to know if you qualify.

In principle, you must be at least 62 years old to be eligible for spouse benefits, and you may not be eligible until you have been married for at least a year unless you were eligible for widow benefits at the time of your marriage. wedding.

You also cannot receive partner benefits if you are already receiving higher retirement benefits on your own record or widow benefits based on your deceased spouse’s record. Dear Larry

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