Social Security is a very important part of the retirement planning efforts of many individuals. Most of the people who receive Social Security say their monthly benefits constitute the majority of the income they receive.

This does not mean that you should be overly reliant on Social Security because the income that it provides is relatively modest. But at the same time it may be a foundation for many and at least a supplement to most, so it is a good idea to understand the details of the program if you are planning for retirement.

One question a lot of people have about Social Security involves the ability to earn income while receiving your benefit. The answer is based on when you start receiving your Social Security benefit.

You reach full retirement age in the eyes of the Social Security Administration when you’re 66 if you were born in 1954 or earlier. The age at which you can begin to receive your full benefit then rises by two months per year up until 1960. Americans who were born in 1960 and after become eligible to receive their full Social Security benefit when they reach the age of 67.

If you have in fact reached the full Social Security retirement age you can earn any amount of money and still receive your full benefit. But you do not have to wait until you reach full retirement age to begin collecting Social Security. You can choose to start receiving a reduced benefit when you are as young as 62 years of age. If you were to work while you are receiving a reduced benefit because you applied early, your benefit is cut by one dollar for every two dollars you earn over a set limit. In 2011 this limit is $14,160.

To learn more about all the intricacies of the Social Security program you may want to visit the website of the Social Security Administration. It has the answers to any questions you may have as well as some very useful tools for planning your retirement.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday