Social Security Matters by AMAC Certified Social Security Advisor Russell Gloor

Dear Rusty:

I’m 62 and still working but would like to get Social Security because we could sure use the extra money. I’ve heard that if I keep working, my Social Security benefit will be less, so now I don’t know if I should go ahead with my Social Security or just wait. I sure don’t want to lose money on my Social Security for the rest of my life.

Signed: Perplexed


Dear Perplexed: 

Social Security rules for when you continue to work after your benefits start can be confusing. Social Security calls this the “Annual Earnings Test”. The basic rule is that you can continue to work after you start collecting Social Security but, depending on how much you earn, they will reduce your benefit payments if you haven’t yet reached your “full retirement age.”

But here’s a key point: You don’t actually lose the amount they will take away, because when you reach your full retirement age (in your case, age 66) your Social Security benefit will be increased to account for what they withheld.

Here’s how it works: If you’re working and collecting Social Security while you’re age 62 through 65, your benefit will be reduced by $1 for every $2 you earn over $16,920. In other words, they’ll take back half of anything you earn over $16,920.

In the year that you become age 66, you can earn up to $44,880, after which they will reduce your benefit by $1 for every $3 you earn over $44,880 (one third).

Note that these earnings limits are for 2017; they change annually. Once you reach your full retirement age of 66, you can earn as much as you want and there will be no benefit reduction.

The way that Social Security gets back what you owe them is by withholding your benefit payments the following year, for as many months as needed for them to recover what you owe from over-earning the previous year. That means that you won’t receive any Social Security payments for one or more months the following year until they recover what’s due.

Losing those payments can hurt, but don’t fret too much because when you finally reach your full retirement age, your benefit amount will be recalculated eliminating those months when your benefit was withheld because you exceeded the earnings limit.

You don’t actually get back the dollars that were withheld due to your over-earning, but rather a formula is used to recalculate your benefit when you reach your full retirement age.

And here’s how that works: If you start collecting benefits at age 62, your benefit will be reduced to about 75 percent of what it would be if you waited until your full retirement age of 66. But because you didn’t actually collect benefits in some months you were paying back what you owed due to over-earning, when you reach your full retirement age they will give you time credit for those months as though you didn’t begin collecting at age 62, but rather an age later than that—62 plus the number of months they withheld your benefits due to over-earning.

So, if you need the money and want to start collecting at 62, but also want to continue working, you can do that. Just be aware that when you exceed those earnings limits, they will withhold your benefits the following year(s) until they get back what’s due them.

But, when you reach your full retirement age, your benefit amount will be increased so that that you may eventually get back the money they withheld. And, that benefit increase at full retirement age will last for the rest of your life.


The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed in this article are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at


The Association of Mature American Citizens is a senior advocacy organization. The organization says it acts and speaks on behalf of seniors to protect their interests and offer practical insights on how to best solve the problems seniors face.