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In this series, “Social Security Secrets,” experts Larry Kotlikoff and Phil Moeller explain the most important things you need to know about this valuable retirement benefit. Kotlikoff and Moeller are co-authors of the New York Times best-seller Get What’s Yours: The Secrets to Maxing Out Your Social Security.
Are collecting Social Security benefits while still in the workforce? Then you may be subject to Social Security’s earnings test, which can reduce benefits based on your earnings record if you make more than a certain amount of money.
In this video, Phil Moeller and Larry Kotlikoff, co-authors of Get What’s Yours: The Secrets to Maxing Out Your Social Security, explain the ins and outs of the earnings test. Some key stuff you need to know:
- If you’re younger than what Social Security calls full retirement age—currently 66—the earnings test can reduce your benefits as much as 50 cents for every additional dollar you earn over a certain threshold.
- The earnings test can reduce not only your benefits, but the benefits of anyone collecting on your work record—your spouse or child, for example.
- The year you turn 66, you’re still subject to the earnings test, though the income bite isn’t as large.
- Once you reach your 66th birthday, you’re no longer subject to the test.
- The benefits that you lose out on because of the earnings test can be restored to you later, in the form of increased benefits.