You are allowed to collect Social Security and still continue to work when you retire early, but only up to a certain amount. If you don't plan correctly, and earn over the limit, the check you expect to get will be reduced and might even be cut completely in some months.
Monica Cox continues to operate a small upholstering business from her home, even after she retired at age 62. She knew Social Security would deduct money from her monthly benefit checks in 2013 because she earned too much in 2012, but she wasn't aware how they would do it.
"It's not that they lower the amount you are getting, you just don't get a check at all, and if you're depending on that check, it hurts," Cox said.
If she earns more than $15,000 again this year, Social Security will, again, deduct one dollar for every two she earns over $15,000. They don't have to take just a little each month.
"Sometimes they just take it out, and you don't get anything for the whole month, they just arbitrarily withhold your whole month's check," Cox said.
Cox says she lost two full months of benefits and had to dip into savings to pay her bills, but she's concerned about people who haven't planned properly and don't have the luxury of some money in the bank.
"Someone who is older, who doesn't have other resources, it could impact to flat not get a check for the whole month," Cox said.
The money isn't lost forever. Seniors like Cox are reimbursed the full amount deducted after they reach full retirement age.
"You do, eventually, get it back, but if you're depending on that right away, it's not going to happen," Cox said.
So, if you plan on working past age 62 and anticipate making more than $15,000, in the years leading up to your full retirement age - which ranges from 65 to 67 - strongly consider putting off Social Security benefits.
At least plan on getting a smaller benefit check each month, or none at all some months, until you reach full retirement age.
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