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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 15588
Experience:  Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
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Hi - I am self-employed and will want to work after retirement.

Resolved Question:

Hi - I am self-employed and will want to work after retirement. I understand the rules about a reduction in benefits depending on how much money is made.

I keep seeing that if you work more than 45 hours/month, you are not considered retired. I can't find any indication of what that means to receiving benefits. Do the same rules apply about reducing the benefit? Or, if the SSA doesn't consider you to be retired, do they treat you differently?

I'm thinking that if I retire early, but some of the benefit is reduced because I'm working, it might wash out in terms of overall benefit because those reduced benefits will be repaid after I reach full retirement age. Does that sound like it makes sense?

Thanks!
Submitted: 1 year ago.
Category: Social Security
Expert:  Megan C replied 1 year ago.

Megan C :

I realize you have a question about social security. My goal is to provide you with excellent service, and help you better understand your options.

Megan C :

How are you today?

Megan C :

Where the 45 hour rule comes into play is the first year of your retirement, where you have already earned over the allowed income limit

Megan C :

There's a special first year rule that allows you to draw a benefit any month that you are considered retired and do not earn more than $1,200 during the month.

Megan C :

But, that's only for the first year of drawing benefits.

Customer:

Hi Megan. Thanks for your help. So, if I work more than 45 hours the second year, it won't have any effect on benefits, is that correct?

Megan C :

That's correct. Also, once you are full retirement age it wouldn't matter at all

Megan C :

You can work as much as you want and draw a benefit once you are full retirement age

Customer:

I understand. Do you ever recommend taking social security early since you'll get the deductions back at full retirement age?

Customer:

if you're still working, that is

Megan C :

Your benefit is forever reduced if you draw early

Megan C :

Drawing early makes sense if you are having trouble paying your bills, or if you are not in good health.

Customer:

What I thought I read is that if they deduct dollars because of higher earnings, they tack it on at full retirement age. Did I misinterpret that?

Megan C :

No, that is correct

Megan C :

But, when you retire early your benefit is lower than it would be at full retirement age

Megan C :

Once you reach full retirement age, you would receive your full reduced benefit

Megan C :

So, if your benefit is $1,000 at full retirement age, you would draw $750 if you took retirement at 62

Customer:

oh, i see what you're saying. so even tho i got it back, it wouldn't add on to the amount, just reimburse me up to the amount.

Megan C :

That's correct

Megan C :

I don't recommend drawing early, unless you are in bad health or you have truly retired and need the benefit to pay your bills.

Customer:

ok I think that does it. I'm hoping that I'll still have a chance to receive social security in a few years! Thanks again - have a great day.

Megan C :

You too. If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

i certainly will.

Megan C :

Thanks so much!

Customer:

is there a way to save our discussion. i clicked save before i saw it also said exit.

Customer:

now i'm not sure what's going on.

Megan C :

Yes, all you do is come back to this same page and the discussion will be there

Customer:

ok, right now all i see is your Thanks so much

Megan C :

You're welcome

Customer:

does the system store our chat? if so, i should be able to find it somewhere

Megan C :

Yes, it saves the chat. Once you rate, come back to this same page and it will all be there.

Customer:

ok, thanks again. Enjoy your day!

Megan C :

You too!

Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 15588
Experience: Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
Megan C and other Social Security Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks, Kathleen for your positive rating. Please come back and visit me any time you need a tax, finance, or social security question answered. It was a pleasure working with you today.

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Megan C
Megan C
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Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level