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.
Have general questions about Social Security? Email them to [email protected], and they might be the subject of a future video!
Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.