Social Security Income Limits

Currently, the obstacles faced by retirees regarding Social Security income limits are being dwarfed by other benefit-related concerns. For example, during the United States’ debt crisis, more people close to or already receiving Social Security benefits are worried that the Social Security system will be severely downsized or soon will be non-existent if our government can no longer sustain it. Here’s hoping that won’t happen and that the fears and threats of “checks not going out” will be nothing more than a scare tactic. Still, there are obstacles retirees face resulting from income limits as retirees take on other jobs to supplement income after their official retirement.

Income limits result in a decrease in Social Security benefits when retirees make additional income from part-time work and other endeavors to supplement any income they may have in the form of pensions, investments, and various other types of income for themselves and their families. Many times, retirees actually do not retire completely, but just “change occupations” about the time they should be finished with their working lives. If there are still mortgage payments to be made, high property taxes, higher utility costs, not to mention the various new taxes and higher living costs that loom on the horizon, older folks are finding it a necessity to obtain at least part-time work to fill in the gaps, as a typical Social Security check is far from enough to cover monthly expenses.

Some retirees are fortunate enough to be able to earn an unlimited amount per year in addition to receiving Social Security and do not have their benefits affected. A person born in 1944, for example, is now allowed to work as much as desired without income limits after retiring from a long-time occupation—the unlimited income becoming possible upon reaching full retirement age.

When this is not the case, retirees work with the understanding that the Social Security Administration will be deducting a certain portion of their benefits depending upon their earnings and wages, according to Social Security guidelines. (See “Working And Getting Social Security At The Same Time.”) The retiree must then weigh options and decide whether it’s worth the time and effort to obtain income from other sources while losing part of their government benefits.

Obstacles include other considerations, too. Some retirees are not ready to take to the rocking chair when a particular date on the calendar rolls around. Many want to continue working, perhaps not primarily for additional income, but for their own sense of fulfillment and to maintain a daily or weekly routine. Part-time work, especially, can help retirees feel needed and useful, and cognitive skills are not neglected or lost due to lack of use. It is important to many older people to maintain vitality through some sort of productive activity. Others simply enjoy being part of a team and like working around others. It’s a way of staying more youthful, as well. Working beyond retirement age is a good way to ward off the downside of aging. Finally, if a spouse or partner is still working, it makes sense to put free time to good use by engaging oneself in some form of income-producing work. Additional funds can be used to maintain a good quality of life and add security to the future.

Taking all this into consideration, having to be concerned about a reduction in Social Security benefits due to income limits seems to be counterproductive. When workers have paid into the system for most or all of their adult working lives, it seems only right that they should have the option of working or not, depending upon what retirement desires (or needs) are, and without concern about losing partial Social Security benefits. Earning too much money after retirement with the threat of losing some part of long-awaited benefits should not have to be an obstacle for our nation’s retired population.