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Stephanie O Joy, Esq
Stephanie O Joy, Esq, Soc. Sec. Attorney
Category: Social Security
Satisfied Customers: 13388
Experience:  19+ years legal exp. - 10+ years owning/operating her own SSD Law practice.
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I turned 62 this month, Oct. 2016. I am considering taking

Customer Question

I turned 62 this month, Oct. 2016. I am considering taking my SS benefits early starting January 2017. I plan to continue to work until my NRA at 66. I currently earn $32,500/yr. I understand the reductions that will be taken from my SS benefits during the period that I am working until I reach NRA and stop working. My question is, how will my SS benefits change after I stop working at age 66? Will there be some increase I may realize because of the reductions taken in the past? Will my benefits revert to a full benefit? I have read that although reductions were taken in the past, that they are not actually "lost". Please explain this. Thank you.
Submitted: 4 months ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 4 months ago.

Hi, my name is***** have been practicing SS LAW full time for 10+ years and look forward to assisting you.

Expert:  Stephanie O Joy, Esq replied 4 months ago.

With regard to your questions:

"My question is, how will my SS benefits change after I stop working at age 66? -------- They will not change at all based on turning your FRA (NRA) unless you have properly reported your earnings in a timely manner and had your benefits reduced in real time. If that is the case, the adjustment for the months you actually didn't end up collecting an early benefit (or portion thereof), will be made. If you don't accurately report expected income and to take real time reduction, and it comes out in the wash a year or two later when IRS communicates with SSA, then, you will pay back your overpayments by no payments at 66 til it is paid off, or partial payments to you at 66, via a payment plan.

"Will there be some increase I may realize because of the reductions taken in the past? Not because of the reductions no, because the reductions are permanent if you take early, once the proper amount is figures out... which can take place a couple of years later, due to timing of tax returns and IRS reporting, etc. BUT, if you DO have to pay back some of your already reduced (due to taking at 62) benefits, then you will be reversing some "early taking months" and that will be added, back - each month, as you know is a small increment, say 5/9 of 1%.

Will my benefits revert to a full benefit? No, unless you pay back ALL early benefits because you were not eligible for them due to excess earnings when you were supposed to be retired early. The 25%+ reduction for taking at 62 is forever - because you are getting 48 extra monthly payments by taking early and it takes a "lifetime" to pay that back out of your own benefit.

"I have read that although reductions were taken in the past, that they are not actually "lost". Please explain this. Thank you. ------- That is correct, but there are two kinds that you may be mixing up. First, when we take early, before our FRA, say at 62, we are asking for 48 extra monthly payments beyond what waiting til full retirement would give us. These extra payments are paid for by you - in the form of taking only about 75% of your normal benefit (PIA) for the rest of your life (or, 5/9 of 1% for each month you take early (give or take). That is where these extra 48 months come from.... you permanently reduce your monthly benefit amount. THis is often called the discount.

Now the reduction of the actual payment due, when taking early, is different. If you were supposed to get 750/month for taking early (instead of your full amount of 1000), but you owe it all back, turns out, because you worked full time and exceeded the earnings limit, then once you pay it all back, it is like you never took that month early, so you get that 5/9 X 1% added back to your benefit amount. Each month you have to pay back of those early retirement taken months, adds that 5/9 X 1% back to your benefit amount once you hit FRA and are no longer subject to earnings limit.

There is often NOT a worthy reason to collect early, although everyone's situation is different. By taking early you 1) reduce your total benefit forever and 2) can't get that 80% hike by delaying taking til 70, if one is still able to work... On the same token, if you have dependents who can take on your record IF you file now, that can be valuable extra that they can't get at any other time.

Expert:  Stephanie O Joy, Esq replied 4 months ago.

I hope this helps! My goal is to provide you with excellent and accurateservice – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions.

Kindly rate me "excellent" when you aredone. I look forward to assisting you in the future, should you have legal questions. Be sure to start future posts with "To ***** Esq., ONLY" if you want me to specifically answer it.

Sincerely, ***** ***** Joy, Esq.

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