How Does Working After Retirement Affect Your Benefits
Working after retirement is becoming more and more common. The average recipient of Social Security retirement benefits is only receiving $1,543 per month. One can quickly see why it often becomes necessary to continue working even when receiving benefits. Some people might continue to work their normal job when they choose to start receiving benefits. Others might decide to return to work at a part-time job. So, how does working affect the benefits that you will receive?
The main thing to understand here is that your benefits can be affected by earning additional income, particularly if you have not reached full retirement age. Those who choose to start their benefits early might not receive their full benefits if they are still working. In 2021, the Social Security earnings limit is $18,960 to still receive full benefits. This means that if you earn more than this amount from another source like a part-time job, then your benefits will be reduced. Your benefits will be reduced by $1 for every $2 that you earn above the limit.
How Much Can You Earn And Still Receive Social Security
When you take benefits while youre still working, Social Security may withhold part of your benefit depending on your income if you havent reached full retirement age. Your full retirement age is between 66 and 67 if you were born from 1943 to 1959 its 67 if you were born in 1960 or later.
Social Security will withhold benefits at the following rates in 2021:
- $1 for every $2 of earned income above $18,960 until the year you reach full retirement age. Lets say youre 64 and earn $20,000 from working, and youre already getting benefits. Youve earned $1,040 above the earnings limit, so Social Security would withhold $520 from your benefit.
- $1 for every $3 of earned income above $50,520 the year you reach full retirement age until the month before youre eligible for your full benefit. Suppose you reach full retirement age in October. Social Security would only reduce your benefits if you earned more than $50,520 between January and September.
These rules apply whether youre an older worker taking benefits based on your own work record or youre getting a spousal benefit or a survivor benefit.
The key to understanding Social Securitys rules about working and benefits is that everything changes when you reach the date when you can fully retire. After that point, you can earn as much as you want and still keep all your benefits. Earlier, though, you can give up some of your benefits.
What Is The Standard For Disability
Who is considered disabled for SSI or SSDI benefits?
To receive benefits under either program, you must meet the SSAs definition of disability. The term disability means that you are unable to engage in substantial gainful activity because of:
- A medically determinable physical or a mental impairment
- Which has lasted or is expected to last for at least 12 months or is expected to result in death.
This standard for disability is described in the below paragraphs.
Disability for adults
In deciding whether you meet the disability requirement, SSA uses a five-step analysis:
Step one: are you working?
If you are working and performing a substantial gainful activity, then you are considered able to work. You are therefore not disabled. The SGA limit is $1,310 per month. If you earn more than $1,310 per month, you are probably not eligible, unless there are special cases. For example, you have intensive job coaching to help you work or you work at a sheltered workshop. If you are not earning significant income, proceed to step two.
Step two: do you have a severe impairment?
You must have a problem which significantly limits your ability to perform basic work activities. The impairment must be expected to last for 12 months or end in death. If you have a severe impairment, proceed to step three.
Step three: does your medical condition match one of SSAs listed impairments?
- Medical findings,
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Earnings Limit For Social Security Disability Benefits
So far we have been mainly focused on income limits for those on Social Security retirement benefits. Many people on Supplemental Security Income and SSDI wonder how work affects your benefits as well. In fact, they often ask, How much can I earn while on Social Security Disability in 2021? When it comes to SSI and SSDI, the rules are a little different. Receiving SSDI or SSI benefits means that a person has been found to be disabled and unable to perform substantial gainful activity. This essentially means that they are unable to perform any type of full-time work and thus earn an income. For those qualifying for SSDI or SSI benefits, an earner can make no more than $1,310 per month. Any income above this amount, even from self-employment, will make them ineligible to receive SSI or SSDI benefits.
Remember that those receiving SSI or SSDI might have to worry about Social Security taxes on their Social Security earnings as well. Since the income limits and average benefits are lower, most people receiving disability benefits will not be required to pay any taxes on their benefits. Remember that the Social Security tax limits are adjusted almost every year too, so make sure that you are aware of the current rules. Recipients of SSI and SSDI are also automatically enrolled in Medicare after a certain period of time.
What Is Social Security Disability
Social Security Disability benefits are not related to workers compensation. You can receive both benefits if you suffer an injury at work that leaves you permanently unable to maintain full-time employment. However, individuals can receive social security disability benefits without an on-the-job injury.
To apply for social security disability benefits, you must qualify in the following ways:
- You are age 18 or older
- You are not currently receiving benefits on your own Social Security account
- You are unable to work due to a medical condition that will last at least 12 months or result in death
- You have not been denied disability benefits within the last 60 days
Your benefits typically begin in the sixth month of your disability. The SSA determines the amount of your benefits based on your age and how long you worked before becoming disabled. They also review your case to determine when your disability began.
If youre unable to work full time while waiting for your benefits, you can work part-time for a small amount of income.
However, its critical to be well-informed about the disability criteria and benefit rules before beginning part-time work. While the SSA reviews your case, you dont want to give them any reason not to believe you are unable to carry on full-time employment with your disability.
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How Do You Know How Much Disability You Will Receive
You can see how much you are likely to receive if you are found disabled by looking on your MySSA account. This is a good rough idea of your monthly benefit amount.
This account will also tell you how much your eligible dependents can receive as well. However, if your date of disability was in the past, the account will not tell you precisely.
How A Lawyer With Our Firm Can Help You Apply For Disability Benefits
An attorney from our firm can offer assistance as you prepare an application for Social Security disability benefits. We can help you determine whether you have enough work credits for SSDI or should apply for SSI benefits. The law does not require you to work with a lawyer on the application and evaluation process for disability benefits, but having someone guide you can make the process go smoother.
Every year, thousands of qualifying individuals are denied Social Security Disability benefits because of errors they made on their applications. Many people have to appeal a denial of benefits to get the assistance they need. Our team can help you avoid this costly mistake or represent you during your appeal if you have already received a denial.
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Experts Advice: Dont Go It Alone
Vieillet says the intricacies of each program are confusing, even to the experts. For the average person, it can be downright overwhelming.
When letters from Social Security start coming in the mail, they scare the bejesus out of people, says Teresa Nier, benefits and employment manager with My Employment Options.
For disabled workers, joining a free work-incentive program and employment network can help. Ticket to Work offers benefits protection for recipients who want to test the employment waters. And organizations like My Employment Options have certified benefits counselors on staff to help applicants trudge through the paperwork and fine print all while finding a job that fits their unique needs.
To avoid unexpected benefits cuts or having to return overpayments to the agency, people need to keep Social Security updated with phone numbers and addresses, Nier says. Open those letters. Ask questions.
For James, the idea of not working is unsettling. He doesnt want to be a burden.
Im more of an entrepreneur, he says. Im a very social person. Im very outgoing.
I want to try to make this work. Somehow.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that dont involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter .
Benefits For A Disabled Child
A child under age 18 may be disabled, but we don’t need to consider the child’s disability when deciding if he or she qualifies for benefits as a dependent. The child’s benefits normally stop at age 18 unless he or she is a full-time student in an elementary or high school or is disabled.
Children who were receiving benefits as a minor child on a parents Social Security record may be eligible to continue receiving benefits on that parents record upon reaching age 18 if they are disabled.
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At What Age Can You Earn Unlimited Income On Social Security
Upon reaching full retirement age, you can earn an unlimited income while still receiving Social Security. Full retirement age varies based on the year in which you were born. That age can range anywhere from 65 to 67 based on your birth year. For those born after 1960, you will have to wait until you are 67 to be considered full retirement age. However, for those born before that, you might be able to retire as early as 65.
What Happens After I Win
The next question that comes up is The judge finds me disabled, can I keep working? The answer to that is yes, same rules apply.
If its Social Security Disability Insurance, then yes you can keep working, same numbers, just keep it under about $272 per week. Youll be fine. You have to keep Social Security updated. You have to let them know how much youre earning. They have a right to know, so the eight hours a day, three days a week, 10-11 bucks an hour, you should be fine.
If you have not been working while youre applying, Social Security has whats called the Ticket to Work program. You can go to any Social Security office, and theyll help you find work. There are programs that can get you back in school. If youre younger, you want to get retrained, you want to learn how to do something else, you want to get back into some kind of simple job that youre interested in still getting out of the house and doing some work, Social Security has programs for that. Theyll help you out.
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The Extended Period Of Eligibility
After your nine-month trial work period expires, you begin the 36-month extended period of eligibility. During this time, you can earn up to the SGA limit and still receive your full monthly SSDI benefits.
The first month you exceed the SGA limit, the SSA no longer considers you disabled. You will get your benefits for that month and the next two months and then benefits will stop.
If your monthly income later falls below the SGA limit again, the SSA can restart your benefits without requiring a new application if you are still within the 36-month extended period of eligibility.
At Berger and Green, we can explain the SSAs rules about returning to work. Call us today at to schedule a consultation.
Call or text or complete a Free Case Evaluation form
If I Earn Income Will I Get Less Disability
Your Social Security Disability payments won’t be lowered if you have some income, but Social Security will cut off your benefits if you earn so much income from working that Social Security no longer considers you disabled. Social Security deems a certain monthly income as “Substantial Gainful Activity .”
If you earn less than the SGA , your monthly benefits won’t be impacted. If you earn more than that amount, Social Security will give you a trial work period of nine months to see if your return to work will be permanent. After that period if up, your benefits will be terminated if you earn more than the SGA amount.
If you earn income while on SSI, your monthly check will be reduced by the amount of approximately half of your part-time earnings. If you earn too much to continue to qualify under SSI’s income limits, your benefits will be terminated.
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Qualify And Apply For Disability Benefits
According to the SSA, you should qualify for Social Security Disability Insurance benefits if:
- Your previous employment participated in the Social Security program
- Your medical condition meets SSAs definition of medical or mental disability
In addition to these two criteria, you must have a disability that prevents you from participating in your previous form of employment. Your disability must prevent you from adjusting to or accepting other forms of employment. Finally, your disability must be expected to have a duration of at least one year or be expected to result in death.
If you meet these criteria, SSA administrators may then use a step-by-step process to determine your eligibility. You may be asked the following five questions:
- Are you working?
- Is your condition on the disability list?
- Can you do the work you did previously?
- Can you do any other type of work?
SSA administrators also consider your disability, age, education, previous work experience, and other factors. Special conditions may apply if you are blind, have low vision, are the surviving spouse of a qualified worker, a disabled child, or a veteran. Speak to your lawyer about how these conditions might affect your eligibility for benefits.
Can I Work While Getting Supplemental Security Income
The other program that you may be eligible for is called Supplemental Security Income. SSI is different from Social Security Disability Insurance they are two totally different programs. If you are on SSI and you are earning an income, Social Security will take 50 cents of every dollar that you earn.
If youre on SSI and youre getting $600 a month and you go out and earn $600 extra, Social Security will take $300 out of your check, so youll get $600 from your employer, your $600 Social Security check will be cut to 300, and your total monthly income will be $900. It is still more than you were going to get from just SSI, but it will be reduced. Just know if youre on SSI, you can work, but they will reduce your check.
If youre on SSDI, you can work and they will not reduce your check. SSDI is not reduced by earning income. Just something to note.
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Calculate Your Disability Benefits With Our Disability Tax Credit Calculator
To estimate the Child Disability Tax Credit or Disability Tax Credit amount your family may receive, you can use our fast and simple Benefits Calculator.
The accuracy of your disability benefits sum will be based on the information you provide in the required fields. Follow the steps below to see how much you or a family member may qualify for!
Now that you know the estimated value of your Canadian disability benefits, the next step is to claim what your family is entitled to. Visit our Apply for Disability page to get started on a claim.
Impairment Related Work Expenses
IRWEs are costs related to a medical condition that you have to pay to do your job. IRWEs must be expenses that you pay for, not your health insurance or anyone else. Keep your receipts for all expenses you think are IRWEs. You need to include them with your pay stub or other earnings information when you report your earnings to Social Security.
Examples of IRWEs include money you spend on:
- Personal Care Assistance services that you use on the job
- Special equipment related to your disability that you buy for your job
- Copayments for prescription drugs that you need to be able to work
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Income Limits For Social Security Retirement Benefits
Many people ask, How much can you earn in 2021 and draw Social Security? The annual limit for 2021 is $18,960 for those who have not reached full retirement age. So, suppose that you begin receiving benefit payments at age 62. This special rule states that you can have no more than $18,960 in annual earnings or else your benefits will be reduced. Keep in mind that the earnings limit only applies to money earned from work. It does not include earnings from investments like an IRA or capital gains. However, if a spouse or child receives benefits based on your work record, their benefits will be reduced as a result of your earnings as well.
If you claim benefits and have been working for the entire year, then it might be a good idea to check out the SSAs earnings test calculator. You should know that it is your responsibility to notify the Social Security Administration of your earnings. Failure to notify SSA might mean that your benefits do not get appropriately reduced, especially in your first year of working. You might continue receiving your full monthly checks, and then you will be forced to repay those extra benefits when you file your income taxes. You might even owe some additional fines and penalties as well. Be sure that you are aware of these rules when it comes to allowable monthly income so that you do not find yourself in this situation.