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Collecting SS before FRA and still working question
Old 11-27-2022, 08:48 AM   #1
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Collecting SS before FRA and still working question

This is about my sister.

She has never been married (no issue about collecting under a spouse's SS) and does not have any children. She is 1 1/2 years away from her FRA. Her annual SS update says she can collect a little more than $1300 per month today or at FRA a little more than $1400. She works 2 jobs but wants to quit the job at a book store. Her annual SS would pay her more than she earns annually at the book store. She will keep her job working in the school system where she earns $21,400 per year.

Per SS website:
Quote:
Working and Getting Social Security At The Same Time You can work and still get Social Security benefits. If you are at full retirement age or older, you may keep all of your benefits no matter how much you earn. Please visit http://www.ssa.gov/benefits/retireme...eincrease.html to determine your full retirement age using our Retirement Age Calculator. If you are younger than full retirement age at any time in 2023, there is a limit to how much you can earn before we reduce your benefits. If you are working or planning to work, we usually ask you to estimate your earnings for the year. If you do not report your estimated earnings and get paid too much, you may have to repay benefits received. • The 2023 earnings limit for people under full retirement age all year is $21,240. We deduct $1 from your benefits in 2023 for each $2 you earn over $21,240.
So if she earns $21,400 and the limit you can earn when under FRA is $21,240 she is earning $160 above the SS limit. If I understand this, the $160/2 = $80 so is her "penalty" that $80? And if yes, that is $80/12 or $6.67 deducted per SS deposit.

Thanks.
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Old 11-27-2022, 09:08 AM   #2
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Sounds right to me by no personal experience with this.
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Old 11-27-2022, 09:45 AM   #3
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That's the way it works, but again, no personal experience. She will also get that forfeited money back in her monthly checks starting at full retirement age. She won't get the full $6.67/ month. I don't know the formula used to calculate this but would imagine it is somehow spread over her actuarial lifetime. So a small bump at full retirement age.
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Old 11-27-2022, 02:06 PM   #4
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It seldom makes sense to file for SS while still working full time, especially before FRA.
Some exceptions are if you are in failing health or have dependent offspring...
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Old 11-27-2022, 02:24 PM   #5
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Originally Posted by Graybeard View Post
So if she earns $21,400 and the limit you can earn when under FRA is $21,240 she is earning $160 above the SS limit. If I understand this, the $160/2 = $80 so is her "penalty" that $80? And if yes, that is $80/12 or $6.67 deducted per SS deposit.
I agree with MissMolly on the above.

As far as doing it, YES! Do it! Her quality of life will take a huge tick upwards while the financial risk/loss of doing so is inconsequential. Why should she continue to work that unwanted second job when the possible negative consequences of switching to SS are so trivial?
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Old 11-27-2022, 02:28 PM   #6
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About her job with the school system - is she paying into Social Security in that job? Some school systems in some states have pensions instead and the employees do not pay into SS. In those situations her SS may be reduced by WEP.

Check out WEP https://www.ssa.gov/benefits/retirem...anner/wep.html

If her school job pays into SS, then no worries!
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Old 11-27-2022, 02:45 PM   #7
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Your sister should also check out the rule for earnings during the first year. SS goes by monthly earnings and not yearly but it seems to work out to the same amount unless her pay is over less than 12 months.
Still seems minimal and I would totally do it if I were in your sisters situation.
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Old 11-27-2022, 02:50 PM   #8
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About her job with the school system - is she paying into Social Security in that job? Some school systems in some states have pensions instead and the employees do not pay into SS. In those situations her SS may be reduced by WEP.

Check out WEP https://www.ssa.gov/benefits/retirem...anner/wep.html

If her school job pays into SS, then no worries!
But it won't be reduced by WEP until she starts collecting her School Pension.
Also if she has 30+ yrs of SS contributions, then WEP does not take away any money.
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Old 11-27-2022, 03:02 PM   #9
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They are not going to deduct $6.67 per social security deposit. I believe that they will withhold 1 social security check and then start her checks and pay her the difference owed the next year. Google How Work Affects Your Benefits. It it a social security pamphlet.
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Old 11-27-2022, 03:11 PM   #10
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They are not going to deduct $6.67 per social security deposit. I believe that they will withhold 1 social security check and then start her checks and pay her the difference owed the next year. Google How Work Affects Your Benefits. It it a social security pamphlet.

Thatís right. And I think thatís how the first year going by month would get her.
Iím just not sure about $1 for every $2 earned if she is already over the maximum amount.
Salary of $21,400/12= $1783.33 per month.
SS max earnings $21240/12= $1770 which would make her ineligible or set at zero actually. Unless they do the 50% but it would still be much more than $6.67/month.
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Old 11-27-2022, 05:41 PM   #11
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Quote:
Originally Posted by Graybeard View Post
This is about my sister.

She has never been married (no issue about collecting under a spouse's SS) and does not have any children. She is 1 1/2 years away from her FRA. Her annual SS update says she can collect a little more than $1300 per month today or at FRA a little more than $1400. She works 2 jobs but wants to quit the job at a book store. Her annual SS would pay her more than she earns annually at the book store. She will keep her job working in the school system where she earns $21,400 per year.

Per SS website:


So if she earns $21,400 and the limit you can earn when under FRA is $21,240 she is earning $160 above the SS limit. If I understand this, the $160/2 = $80 so is her "penalty" that $80? And if yes, that is $80/12 or $6.67 deducted per SS deposit.

Thanks.
My opinion is she really should call and speak with the Social Security office. They can check her record, ask the correct questions, and she should tell them up front about her school pension situation. They will need to speak with her. You can be with her to listen if she wants or with her permission they can speak with you. This is too important with lasting results to rely on guesswork.
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Old 11-27-2022, 06:29 PM   #12
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It seldom makes sense to file for SS while still working full time, especially before FRA.
Some exceptions are if you are in failing health or have dependent offspring...
For her it does make sense. She is close enough to FRA that what she gives up, $100, is a minor amount of money. She is in good health but there are things I didn't discuss as they seemed irrelevant. The job has been taking a terrible toll on her mental health for a few years, I didn't know about this until Thanksgiving Day. She has almost no time to herself. She works a mere 15 hours a week at the book store but it is over 3 or 4 days a week at night and on weekends. Her pay after 24 years is 25 cents above the minimum wage they pay someone freshly hired. They cheated her out of 80 hours of vacation pay that was about $1600 when they closed due to Covid and her moron supervisor coded her as 15 hours per week vs the 20 she was when they reopened the store and that caused her to lose all that and HR said sorry you are just 15 hours per week. The store is in a very dangerous location. There's methadone or drug clinic next door, very sketchy people hanging out around and inside the store. They surround cars and people in the parking lot and threaten them for money. The police never come when called. Overdoses in the bathroom of the book store, suicides also, mentally ill people in the store acting crazy, the management says let them steal whatever they want do not film or call the police, feces smeared all over the bathroom walls, counterfeit $100 bills passed and when they fail the test the scumbags throw the books at her, 2 guys last week filming and asking for impossible things then ranting about how all the problems they have are due to white people and digging in a bag, what could come out a gun or knife? Should I go on! No she needs to never step foot in that place again.

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I agree with MissMolly on the above.

As far as doing it, YES! Do it! Her quality of life will take a huge tick upwards while the financial risk/loss of doing so is inconsequential. Why should she continue to work that unwanted second job when the possible negative consequences of switching to SS are so trivial?
Exactly, I detailed that in the prior post. She would be much happier just working at the school 5 days a week and not having to go to the book store at night and on weekends.

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Originally Posted by Sue J View Post
About her job with the school system - is she paying into Social Security in that job? Some school systems in some states have pensions instead and the employees do not pay into SS. In those situations her SS may be reduced by WEP.

Check out WEP https://www.ssa.gov/benefits/retirem...anner/wep.html

If her school job pays into SS, then no worries!
In this state the teachers do not pay into SS but she is not a teacher. She is paid from some government program that provides the funding and is a helper/tutor not exactly sure. She could never have accumulated $1300 in SS benefits per month just working at the book store for 24 years if the income from her school job was not counted in the calculation. The school job in conjunction with the bookstore is why the benefit is so high so I am positive she is paying SS out of each paycheck. Frankly, I was shocked that her SS benefit was going to be that high, I would have thought more like $800 or $1000 at the most. If worse comes to worse, she has me to help her and I would, I have sent her a check every month for years just to give her some extra money and I have paid for a few major projects done in her condo that would have been hard for her to pay.
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Old 11-28-2022, 05:58 PM   #13
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She probably pays more payroll taxes doing that 2nd job than the SS $80 reduction. So quitting that stressful 2nd job in a dangerous neighborhood and start SS will also save her money as well as her health/life.
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Old 11-28-2022, 06:55 PM   #14
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The answer is simple, no need to do the math. The second job sucks, SSA pays more, quit the second job and take SSA and relax.
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Old 11-28-2022, 07:58 PM   #15
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WOW..
Her sanity is far more important than that dangerous 2nd job, she needs to get out of there immediately. With these working conditions she should probably still be able to get unemployment benefits but it might not hurt to have her go to her doctor and get it documented that her mental health is suffering due to to conditions at that job.
At her income level even with both jobs, she is probably eligible for many benefits that can help reduce her living expenses. For example most gas and electric companies offer discounts to senior and/or low income customers usually around 20% off the monthly bills. In California the income level for 1 or 2 people is 36,000 to qualify for this and other benefits, it may be different in other states but it's certainly something she should check out. The government would pay for a good portion of her internet bill monthly if she applies due to the Affordable Connectivity Program that was introduced last year. She'd probably get food stamp assistance as well, I'm sure there is a website for her state that would list benefits for low income. She's paid into the system all her life, and when she needs help, they should be there for her.
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Old 11-28-2022, 08:17 PM   #16
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So here is an update. The benefit amount of about $1300 today was correct. What I had wrong is the benefit amount at FRA, 1 1/2 years from now, is about $1600 not a mere $100 more at $1400. At FRA, it is approximately $260 per month more but the actual number is $3205 more per year at FRA. That is a lot. But SS today is just over $4k more than she grosses with the book store job and the stress and danger go away.

We talked numbers and it would be hard to make up the lost $11k from the bookstore to delay to FRA at the school, impossible really. She is sick of working in retail and does not want to work at McD's ($20/hr to start vs $14.75 at the bookstore) or at Subway. The Sunday paper had about 14-16 jobs listed and she wasn't qualified for some and would not want to work at others. I guess employers don't advertise in the Sunday paper which is odd as you constantly hear about how businesses can't find help.

I also found out her job is a teacher but she is not employed by the town and is not in the union as the funds come from a federal source. She is concerned about what is the right or best thing to do, it's hard to change course after so many years as she feels she may be making a mistake. I assured her that staying at the book store IS the mistake and that after analyzing the situation today with actual dollars, applying for SS is the smartest way to go.

Thank you for your feedback.
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Old 11-28-2022, 08:51 PM   #17
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I would suggest that she contact SSA and ask some questions about the impact her school salary will be on her benefits.
She needs to know exactly what she will be getting.

I would also suggest that she look up the One Stop/Americas Job Center for her area.
She should look for the Workforce Innovation and Opportunities Act (WIOA) program. They should be able to assist in finding jobs appropriate for her skills. Depending on how the local WIOA is organized they could also help with funding for training etc.
For example- I ran the WIOA program in my county during the 2008 recession and we brought in trainings on how to look for jobs on the internet for people who hadnít had to look for a job in 15-20 years.
There were other programs as well.

She definitely needs out of the bookstore.
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Old 11-29-2022, 04:48 PM   #18
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I would suggest that she contact SSA and ask some questions about the impact her school salary will be on her benefits.
She needs to know exactly what she will be getting.

I would also suggest that she look up the One Stop/Americas Job Center for her area.
She should look for the Workforce Innovation and Opportunities Act (WIOA) program. They should be able to assist in finding jobs appropriate for her skills. Depending on how the local WIOA is organized they could also help with funding for training etc.
For example- I ran the WIOA program in my county during the 2008 recession and we brought in trainings on how to look for jobs on the internet for people who hadnít had to look for a job in 15-20 years.
There were other programs as well.

She definitely needs out of the bookstore.
doing taxes (ie HR BLOCK ) is part time, seasonal, something like that might work better for her, some training involved and a learning curve, but a reasonable retirement or 2nd job for some.
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Old 11-29-2022, 04:55 PM   #19
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You never mention her expenses so there is no way to know if the missing book store wage coupled with the permanent reduction in her SS will be a problem. You don't need share but as her sibling I'm hoping you are fully informed about her finances.
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Old 11-29-2022, 05:10 PM   #20
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doing taxes (ie HR BLOCK ) is part time, seasonal, something like that might work better for her, some training involved and a learning curve, but a reasonable retirement or 2nd job for some.

This is a great idea and something she might be able to do and collect SS if itís needed.
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