Working/taking SS before FRA question

[Luvdogs]

DH FRA is in 2019. He is considering retiring in the next month or two. I thought that he could not take SS in 2018 since he is above the income limit for 2018.

But in my Fidelity newsletter today it said--

Tip: You should also be aware of a special rule for the first year of retirement. This rule allows you to get a full Social Security check for any whole month you’re retired, regardless of your yearly earnings. This helps people who retire in midyear or later who have already earned more than the annual earnings limit.


So if he retires in September, he can still collect SS for October-December 2018 without any penalty? Is that correct? I'm not doubting Fidelity, just doubting my comprehension!

Thanks!

[Crabby Mike]

The answer is here:


https://www.ssa.gov/pubs/EN-05-10069.pdf

[joeea]

Quote:

Originally Posted by Luvdogs DH FRA is in 2019. He is considering retiring in the next month or two. I thought that he could not take SS in 2018 since he is above the income limit for 2018.

There is no income limit for collecting social security benefits.

As long as you are at least 62, you can always begin collecting benefits without regard to your income. (It may not make financial sense to do so, but that's a different question.)

[COcheesehead]

Quote:

Originally Posted by joeea There is no income limit for collecting social security benefits. As long as you are at least 62, you can always begin collecting benefits without regard to your income. (It may not make financial sense to do so, but that's a different question.)

This may be true, but how those benefits are taxed is another story.

[MissMolly]

Quote:

Originally Posted by joeea There is no income limit for collecting social security benefits. As long as you are at least 62, you can always begin collecting benefits without regard to your income. (It may not make financial sense to do so, but that's a different question.)

This is not entirely correct. Yes, you can file for SS benefits as early as 62, but if you are below full retirement age there are restrictions on how much you can earn before they begin pulling back the SS payments to be distributed later (after full retirement age). In 2018 they will deduct $1 for each $3 earned over $45,360.

[Luvdogs]

Just to clarify--I know that you can file at 62+ but then SS temporarily reduces your benefits if you earn more than 17K.

But if you are under FRA during the first year--for those who retire toward the end of the year and have already earned more than 17K--it appears that there is not a reduction to your SS.

The link on post #2 also indicates that, I think...??

This is for the first calendar year only (or portion thereof).

[MissMolly]

Quote:

Originally Posted by Luvdogs Just to clarify--I know that you can file at 62+ but then SS temporarily reduces your benefits if you earn more than 17K. But if you are under FRA during the first year--for those who retire toward the end of the year and have already earned more than 17K--it appears that there is not a reduction to your SS. The link on post #2 also indicates that, I think...?? This is for the first calendar year only (or portion thereof).

Yes, as long as you don't earn more than $1,420/month after filing for SS. Anything earned prior to filing for SS is not considered the first calendar year.

[joeea]

Quote:

Originally Posted by COcheesehead This may be true, but how those benefits are taxed is another story.

There are lots of other stories. But income doesn't stop you from receiving benefits.

[joeea]

Quote:

Originally Posted by MissMolly This is not entirely correct. Yes, you can file for SS benefits as early as 62, but if you are below full retirement age there are restrictions on how much you can earn before they begin pulling back the SS payments to be distributed later (after full retirement age). In 2018 they will deduct $1 for each $3 earned over $45,360.

What I wrote was entirely correct

1) As long as you are at least 62
2) you can always begin collecting benefits
3) without regard to your income.

There is no income limit such that you cannot start collecting benefits at 62.

Lots of factors go into determining the size of your benefit check. But that wasn't the question I answered.

[joeea]

Quote:

Originally Posted by Luvdogs if you are under FRA during the first year--for those who retire toward the end of the year and have already earned more than 17K--it appears that there is not a reduction to your SS.

I believe that is only true if you earn $1,420 or less in the months you are receiving benefit checks.

So if you retire toward the end of the year and don't keep working, then you are good to get a full check.
But if you earn more than $1,420 in a month after retiring, you are not.

[kimcdougc]

Quote:

Originally Posted by joeea I believe that is only true if you earn $1,420 or less in the months you are receiving benefit checks. So if you retire toward the end of the year and don't keep working, then you are good to get a full check. But if you earn more than $1,420 in a month after retiring, you are not.

Correct.