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Should You Take Early Social Security If You're Still Working?

Everyone wants to get as much from Social Security as you can. But if you decide to start receiving Social Security before you reach full retirement age and keep working, you can end up forfeiting some of your hard-earned benefits.

In the following video from our Social Security Q&A series, Dan Caplinger, The Motley Fool's director of investment planning, answers a question from Fool reader Rob, who asks whether he should claim early benefits when he turns 62 and how much those benefits will get taxed. Dan notes that there are actually two issues at play: if you earn more than $15,480 in 2014, then someone who's age 62 will lose $1 of benefits for every $2 you earn above that limit. Completely separate is that a portion of your Social Security benefits can be subject to income tax at your ordinary tax rate if your taxable income is above a certain amount. Dan concludes that typically, if you're still working and receiving substantial pay, it makes sense to delay taking Social Security to avoid forfeiture and to let your benefit amount grow.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Have general questions about Social Security? Email them to SocialSecurity@fool.com, and they might be the subject of a future video!


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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