How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Stephanie O Joy, Esq Your Own Question
Stephanie O Joy, Esq
Stephanie O Joy, Esq, Soc. Sec. Attorney
Category: Social Security
Satisfied Customers: 13281
Experience:  19+ years legal exp. - 10+ years owning/operating her own SSD Law practice.
10805288
Type Your Social Security Question Here...
Stephanie O Joy, Esq is online now
A new question is answered every 9 seconds

What will be my monthly benefit at age 65 if I start taking

Customer Question

What will be my monthly benefit at age 65 if I start taking early benefits at my 63rd birthday this July 18th and I continue to work making $56,000 a year until July 18, 2018.
Submitted: 9 months ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 9 months ago.

Hi, my name is***** and I am here to assist you. I am a social security attorney in my private practice – that is ALL I do. Please let me know that my post here is coming through for you by typing a quick reply.

Customer: replied 9 months ago.
I see your post.
Customer: replied 9 months ago.
I am eligible for maximum benefits at full retirement age
Expert:  Stephanie O Joy, Esq replied 9 months ago.

How do you know you will be eligible for maximum benefits at your FRA? You mean 2600-2700?

Customer: replied 9 months ago.
Customer: replied 9 months ago.
I have a confirmation letter from SS office saying I am eligible for maximum amount at age 66...I think it is $2,642...???
Customer: replied 9 months ago.
whatever it is...I don't have my hands on the number right now
Expert:  Stephanie O Joy, Esq replied 9 months ago.

If you look at your annual SS earnings statement (which is likely what you have) (it is 4 sides/pages usually) it will tell you X amount at 66. It typically doesn't say what the max is in general, just estimate what you would get if you waited til your FRA to collect. But it is an estimate because they don't run final numbers, which includes a look at every year of income you have had in your life, along with an indexing of prior years so the numbers are properly reflecting equivalence given inflation, etc., and then they use the top 35 years to determine your lifetime average monthly earnings, to which they apply a % to get your benefit amount. Poorer lifetime earners get a higher % of their LAME while higher earners like yourself, get a lower %, plus a cap at that $2600-$2700 amount. Note that if you waited til age 70 to collect it, you'd actually get more like $3500-3600, due to waiting.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

So, if your new work income of $56k doesn't effect your LAME at all or much, there will be no change in benefit amount based on that work, or only an incremental change that may not be notable.

Customer: replied 9 months ago.
What I am asking is that if I take early retirement and continue to work, those benefits will be taken away from me but added back when I stop working...what then will be my monthly benefit at age 65? 66?
Expert:  Stephanie O Joy, Esq replied 9 months ago.

Now, if you start collecting early, instead of wait til 66, you will have approximately 8% reduction per year you take early. It is a permanent reduction. So if 2642 is your amount if you waited til 66 (it is not 65, although Medicare remains at 65), then collecting at 63 will cause an approximate 24% reduction, give or take off of the age 66 amount.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

Ah, yes, if you collect early AND work, you will pay back $1 for every $2 you earn OVER $15720.

Customer: replied 9 months ago.
but how much will be added for working 2 years
Expert:  Stephanie O Joy, Esq replied 9 months ago.

and yes, they will be added back in the form of a higher benefit than the reduced amount you were opting for. On a month by month basis, that % reduction gets added back to determine your true benefit amount later.

Customer: replied 9 months ago.
at $56,000
Customer: replied 9 months ago.
24% reduction permanent, how much added to return my benefits not received due to working
Expert:  Stephanie O Joy, Esq replied 9 months ago.

This is best left to an accountant, of course, which I am not the math guru, just the SS lawyerif you can explain to him the law, but it goes like this.

If you took at a 24% discount. But 2 of those 3 early years are reversible, then your reduction would only be for that last year that you actually TOOK the early benefit (from 65 to 66). So I'd estimate that your benefit would become not 24% less than your 2642 but only 8% less.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

If you take at 63-64, and 64-65, but then stop working, you don't have to pay back that last year since you were not earning over the earnings limit.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

Are we on the same page?

Expert:  Stephanie O Joy, Esq replied 9 months ago.

SO in essence you only took early for 1 year, not 3. Agree?

Customer: replied 9 months ago.
ok...that sounds simple...never really thought of it in that way...i thought the amounts taken away would be added somehow, but your process is easier to understand.
Customer: replied 9 months ago.
there is no benefit in taking benefits at age 63 and working
Customer: replied 9 months ago.
just keep working at take benefits whenever
Expert:  Stephanie O Joy, Esq replied 9 months ago.

They are added in the sense that your benefit amount will be reverse from that rather substantial reduction to a lesser reduction.

Customer: replied 9 months ago.
with 8% per year early permanent penalty
Customer: replied 9 months ago.
That answers my question
Expert:  Stephanie O Joy, Esq replied 9 months ago.

It can depend on one's personal situation - for instance, let's say you have a spouse and 2 minor children, and the spouse doesn't have a work record on her own and is 66. You could file now, collect and return what you get, so THEY could collect their dependent benefits. I know some people who do the math and it is SO worth it, even to suffer that reduced amount forever (unless they work and reverse it a bit). Plus, they can suspend their own come age 66 to get those DRCs and increase their amount by that 32%.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

(But, suspending at 66 is now going to mean that dependents get suspended to, so that attractive option for some is going away somewhat, depending on whether they have minor kids/spouse that can collect on their record for a spell.)

Customer: replied 9 months ago.
I am single with no children but could get married to a younger woman 10 years with children if it helped, but i don't think it would.
Expert:  Stephanie O Joy, Esq replied 9 months ago.

Definitely a personal/financial decision. I won't have minor children, presumably, when I am 62+, and my spouse works himself (and hopefully still will be) so barring any bad events, I'd imagine I will go til I am at least 66 but possibly 70.

Expert:  Stephanie O Joy, Esq replied 9 months ago.

Lol, the marriage thing and raising the kids would likely far outweigh the income you get the kids. Unless they live in the closet, lol.

Customer: replied 9 months ago.
the kids are not minors any more...I would say it would be difficult to be 66 with minor children
Expert:  Stephanie O Joy, Esq replied 9 months ago.

Some decide to collect at their FRA while still working, since there is no limit at that point. They pocket/save the SS benefit, while living as they always have on earnings. If one can invest that SS so it brings in an income that makes up for the loss of that 32% increase, I suppose that would be beneficial.

Customer: replied 9 months ago.
I am lucky to get 3% annuity and not willing to take risks to make 32%
Expert:  Stephanie O Joy, Esq replied 9 months ago.

I agree it would be difficult! It is difficult regardless, but you'd be suprised perhaps by how many visitors I get who have just that sitch. Usually a 60s plus guy with the 40ish wife and 10 year old kid :)

Expert:  Stephanie O Joy, Esq replied 9 months ago.

What is the risk with the 32 you are thinking of?

Customer: replied 9 months ago.
I live in Nashville, TN and real estate development is real hot right now...
Customer: replied 9 months ago.
but you are taking a risk of loosing if things don't go just right cuz you are dealing in large sums of money
Customer: replied 9 months ago.
Thank you for being so informative. Sounds like 66 or 65 is it...hope I make it that long
Customer: replied 9 months ago.
Have so many other things I want to do
Customer: replied 9 months ago.
Gotta go now...thanks...
Expert:  Stephanie O Joy, Esq replied 9 months ago.

Good luck!

Related Social Security Questions