Having a job and social security may cost you

Working _and_ getting a Social Security benefit every month sounds like a great idea, right? Retirees who have spent at least 20 years in the military can embark on a second career while

they collect a pension. So can many local, state and federal employees of a certain age who have worked a specified number of years. But Social Security doesn’t act like a pension plan. If

you file for Social Security before reaching full retirement age and continue working, you could temporarily lose some of your monthly benefit. You will get the money back, little by little

every month, after you reach full retirement age. VIDEO: CAN I COLLECT SOCIAL SECURITY WHILE I'M WORKING?  WHY IS FULL RETIREMENT AGE SO IMPORTANT? If you’re 62 this year — or for

anyone born in 1960 and later — your full retirement age is 67. And if you choose to apply for Social Security before your full retirement age, you could get dinged in a couple of ways: *

YOUR RETIREMENT BENEFIT will be reduced by as much as 30 percent, permanently. * YOUR WORK INCOME will be put to the test — specifically, the Social Security retirement earnings test. Why

does the government have an earnings test? It’s a legacy of Social Security’s initial goal to provide a guaranteed income for older adults who have retired from work. If you can still work,

you’re not really retired, the thinking goes. The test has become less stringent than in the past. It used to apply until age 70 but now ends at full retirement age. WHAT THE RETIREMENT

EARNINGS TEST DOES If you’re younger than full retirement age and your earnings from work exceed $23,400 in 2025, the Social Security Administration (SSA) will withhold $1 from your benefit

payment for every $2 in earnings above the limit. Exceed the level by enough, and your entire benefit could be withheld. If you work for someone else, your gross wages count toward the

earnings test. If you’re self-employed, your net earnings will be used. Earnings also include bonuses, commissions and vacation pay, SSA says. What doesn’t count: annuities, interest,

investment income, pensions, and government or military retirement benefits. HOW YOUR BENEFIT COULD BE AFFECTED Let’s say you turned 62 in December 2024. You’re earning the U.S. median

income — $1,165 a week, or $60,580 a year — but you’re considering starting Social Security to bring in a little more. Let’s also say you would qualify for the average Social Security

retirement benefit — $1,925 a month as of late 2024 — if you had you waited to collect until age 67, your full retirement age. If you take the 30 percent cut to start immediately, your

benefit will be $1,347 a month, $16,170 a year. Think twice about filing. You’ve already flunked the earnings test. If you earn too much after starting to collect Social Security before full

retirement age, the extra benefits you thought you would get could be deferred. If you earn too much after starting to collect Social Security before full retirement age, the extra benefits

you thought you would get could be deferred. Your income exceeds the annual limit by $37,180. Social Security would reduce your payments for the year by half that, $18,590, wiping out your

anticipated extra. What if you scale back to a part-time job that will pay you $40,000 in 2025? You’re still over the cap, but not by enough to erase your benefit. The reduction for the year

would be $8,300, or half the difference between your income and the earnings limit. If you plan to keep working, do your homework on the earnings test. You can have Social Security do the

math. Just enter your expected earnings and benefit information into the agency’s Retirement Earnings Test Calculator. JOIN AARP’S FIGHT TO PROTECT SOCIAL SECURITY You’ve worked hard and

paid into Social Security with every paycheck. But recently, we’ve heard from thousands of worried Americans.   Join us in sending a loud and clear message to lawmakers. ARTICLE CONTINUES

AFTER ADVERTISEMENT HOW THE EARNINGS TEST CHANGES AS YOU AGE The examples above are for the basic earnings test of $23,400 a year. That’s the cap for reaching full retirement age in 2026 or

later. If you reach full retirement age this year, you’ll face a less restrictive limit of $62,160. And Social Security holds back $1 in benefits for every $3 in excess earnings until the

month of your birthday. At that point, the test goes away, and the SSA starts paying you back. HOW YOU GET YOUR MONEY BACK NO WINDFALL. Don’t expect the money taken out to be given to you in

a lump sum when you reach full retirement age. It will be returned to you gradually as you get older because the SSA recalculates your retirement benefit to credit you for the withheld

money. HIGHER MONTHLY BENEFIT. For instance, if you continue to make the median income for the next five years until your full retirement age at 67 and continue to flunk the retirement

earnings test, Social Security officials will give you credit for all five additional years of work and say you retired at age 67 even though you filed at 62. That later work could be among

your 35 highest earning years, potentially increasing your monthly Social Security benefit beyond what you expected earlier. Even if you had years when only some of your Social Security was

withheld, your benefit will be reset to a different filing date closer to your full retirement age. That means a higher monthly retirement benefit. RELATED ABOUT _Andy Markowitz is an AARP

senior writer and editor covering Social Security and retirement. He is a former editor of the _Prague Post_ and _Baltimore City Paper. _Jammie Lyell is the Social Security program manager

for AARP's office of community, state and national affairs. He formerly worked at the Social Security Administration as a legal administrative specialist and technical expert._ NEXT:

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