Today’s Social Security column addresses questions about whether working before filing can incur the income test, the full retirement age for survivor benefits versus retirement benefits, and more about widow’s benefits. Larry Kotlikoff is a professor of economics at Boston University and founder and president of Economic Security Planning, Inc.
Will working before my pension benefit lead to deductions?
Hi Larry, I will be 66 and four months in April. Will I lose money by working in the four months before I start collecting? Thanks, Chuck
Hi Chuck, To be clear, there is no limit to how much you can earn from the month you reach full retirement age (FRA). So if you reach FRA in April 2023 and if you start taking your benefits that month, you will not lose any of your benefits, regardless of how much you earn before or after that month.
The only way you need to worry about how much you’ll earn before FRA is if you want to withdraw your benefits before FRA. Benefits before FRA may be withheld if you earn more than the income test-exempt amount. The income test exempt amount for people who achieve FRA in 2022 is $51,960, but only income in months prior to the month in which a person achieves FRA counts toward that limit. The 2022 exempt amount for people who fall under FRA in 2022 is $19,560.
The income test exempt amounts for 2023 are $56,520, but it won’t matter in your case unless you want to start drawing your benefits before the month you reach FRA. You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or nonprofits can give good suggestions if they are built with extreme care. Dear, Larry
Is FRA for Widow’s Benefits different from FRA for SS?
Hi Larry, Is FRA for widows benefits different from FRA for retirement benefits? I believe I read on the SSA website that for someone born in 1955, FRA for widow benefits is 66 and for retirement benefits is 66 and two months. Is this correct? Thanks, Julie
Hi Julie, Yes, but only for widows born in the 1940s through 1961. The Full Retirement Age (FRA) for Widow’s Benefits for people born in those years is two or four months earlier than their Social Security FRA security. Certainly pension benefits.
However, keep in mind that even if a person’s FRA for a widow’s (widower’s) benefits is earlier than their FRA for retirement benefits, their FRA for retirement benefits is controlling for the purposes of the Social Security income test. So even if a person reached FRA for widower’s benefits, there would still be a limit on the amount they can earn and collect widower’s benefits until the month they reach their FRA for retirement benefits. Dear, Larry
Is there a difference between a widow’s benefit and a survivor’s benefit?
Hello, I will be turning 60 in March and I will be applying for benefits. Is there a difference between a widow’s benefit and a survivor’s benefit? Thanks, Stacy
Hi Stacy, Widow’s benefits are just one category of Social Security survivor benefits. Other types of survivor benefits include child benefits, parent benefits, child benefits for mothers and fathers, etc. Each type of survivor benefit has different eligibility requirements and each type of survivor benefit has its own rules for calculating benefit percentages. Dear, Larry