Social Security: 2 Must-Know Tips About Working and Taking Early Benefits

Social Security is a helpful source of income for those 62 or older. But if you retire before your full retirement age, which is currently 66, you need to understand how you can lose your benefits if you earn too much at your job. In addition, what many don't realize is that you can get some of those lost benefits back later.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about working while taking early Social Security benefits. Dan notes that the wage limit for those ages 62 to 65 is $15,480, with you losing $1 of benefits for every $2 in earnings above that limit. For those reaching retirement age this year, a higher wage limit of $41,400 applies. But Dan also points out that you don't just lose the forfeited amounts forever. When Social Security takes away your benefits for a given month because you earned too much, the program later increases your monthly benefit check. The formula essentially gives you credit for the months you didn't get benefits, treating you as if you hadn't retired until a later age. Dan concludes that you might never get back all the money you forfeited by working and taking early benefits, but you at least will receive a portion of those lost amounts.

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  • Report this Comment On July 06, 2014, at 12:41 AM, dusty10x wrote:

    An example of someone who receives $2,000 a month benefit.....Works and makes too much money and loses that months benefit and receives nothing.....The higher benefit you receive later on is $13.50 more per month for each month you lost your $2,000 monthly benefit you "were" due.....Funny how they tell you you will get a higher benefit but fail to tell you how little it is............

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Dan Caplinger

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 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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