America is aging rapidly as the baby boomer generation starts to reach retirement age. Various research studies have been conducted and the results would indicate that a significant percentage of these people who are entering their golden years may have to continue working beyond the typical age of retirement.
If you don’t want to be forced to work after you become eligible to receive Social Security you will probably have to plan ahead carefully over an extended period of time and stick to the plan with discipline. The best way to proceed to this end would be to sit down with a good retirement planning lawyer early on during your professional career so that you can map out a path that leads to a comfortable retirement.
Of course some people simply enjoy what they do and they want to continue working even if they don’t have to do so out of financial need. However, a common question arises for individuals who want to work while they are collecting Social Security: Is there any penalty for earning a paycheck that would reduce your Social Security benefit?
The answer is that there may be a penalty if you choose to retire early. You can elect to start receiving your Social Security benefit when you are as young as 62 but your benefit would be less than it would be if you waited until you reached full retirement age. If you retire early, you can earn up to $14,640 per year without seeing your benefit reduced at all. (This is the figure for 2012.)
If you retire early and earn more than $14,640, your benefit would decrease by one dollar for every two dollars you bring in that exceeds this threshold.
Once you reach your full retirement age you no longer have any limitations with regard to how much you can earn without having your benefit reduced.
Larry Parman
Author, President and Founding Attorney
Parman & Easterday
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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