Your Retirement Plan
For almost every American worker, Social Security is "part of the plan" for a secure retirement. It's important to know how the program works. If you have questions, the answers are easy to find when you visit the Social Security website at www.socialsecurity.gov . Knowing how working affects your Social Security retirement benefits can be an important part of your plan.
How earnings affect your benefits
You can continue to work and still get Social Security retirement benefits. Your earnings in (and after) the month you reach your full retirement age will not affect your Social Security benefits. However, they will be reduced if your earnings exceed certain limits for the months before you reach your full retirement age. (The full retirement age is 66 for people born in 1943-1954 and will gradually increase to 67 for people born in 1960 or later.)
• If you are younger than full retirement age, $1 in benefits will be deducted for each $2 in earnings you have above the annual limit ($14,640 in 2012).
• In the year you reach your full retirement age, your benefits will be reduced $1 for every $3 you earn over a different limit ($38,880 in 2012) until the month you reach full retirement age. Then you get your full Social Security benefit payments, no matter how much you earn.
If you are younger than full retirement age and some of your benefits are withheld because your earnings are more than $14,640, there is some good news. When you reach full retirement age, your benefits will be increased to take into account those months in which you received no benefit or reduced benefits.
Also, any wages you earn after signing up for Social Security may increase your overall average earnings, and your benefit probably will increase.
You can learn more about the earnings test, including the new 2013 limits and how benefits may be reduced by visiting our website, www.socialsecurity.gov and searching on the topic earnings test.
You can also find out what your full retirement age is at our retirement page, www.socialsecurity.gov/retirement.
Revising your estimate
When you work, you should save your pay stubs. At any time during the year, if you see that your earnings will be different from what you estimated, you should call us to revise the estimate. This will help us keep the amount of your Social Security benefits correct.
About mid-year, we may send you a letter asking you to estimate your current and next year's earnings. Your estimates will help us avoid paying you too much or too little in benefits.
If you also are receiving Supplemental Security Income (SSI) payments in addition to your Social Security benefits, you must report all of your earnings to Social Security.
Paying taxes on your benefits
About one-third of all people receiving Social Security benefits have to pay taxes on their benefits. You will have to pay taxes on your benefits if you file a federal tax return as an "individual," and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. If you are married and file a separate return, you probably will pay taxes on your benefits.
To have federal taxes withheld, you can get a Form W-4V from the Internal Revenue Service or by visiting our website, www.socialsecurity.gov. After completing and signing the form, return it to your local Social Security office by mail or in person.
If you apply for Social Security or Supplemental Security Income benefits, you must receive your payments electronically. If you did not sign up for electronic payments when you applied for benefits, we strongly urge you to do it now. You must switch to electronic payments by March 1, 2013. If you don't, the U.S. Department of the Treasury may send your benefits via the Direct Express® card program to avoid an interruption in payment.
It's safe, quick and convenient.
If you are already receiving benefits, you can obtain a password and start or change Direct Deposit online. You can also sign up at your bank, credit union or savings and loan.
Or call Social Security at 1-800-772-1213 (TTY 1-800-325-0778).
Contacting Social Security
Our website is a valuable resource for information about all of Social Security's programs. There are a number of things you can do online.
• If you get benefits
o Change your address or telephone number
o Get a replacement Medicare card
o Request a proof of income letter
o Sign up for or change direct deposit or Direct Express
o Get a Form 1099/1042S, Social Security Benefit Statement
• If you do not get benefits
o Apply for Retirement, Disability, Medicare, Extra Help
o Get a retirement benefits estimate – MySocialSecurity.gov
o Use benefit planners to calculate your benefits
In addition to using our website, you can call us toll-free at 1-800-772-1213. We treat all calls confidentially. We can answer specific questions from 7 a.m. to 7 p.m., Monday through Friday.