The Social Security Income Penalty Will Be Refunded To You At Full Retirement Age скачать в хорошем качестве

The Social Security Income Penalty Will Be Refunded To You At Full Retirement Age

If you decide to turn on your Social Security before your full retirement age, the IRS has something called the Social Security Earnings Test where they assess a penalty if you make over a specified amount during that tax year. For 2022, that amount is $19,560 and the penalty is $1 for every $2 you earn over that threshold, but not many taxpayers realize that Social Security actually refunds you the penalty amounts once you reach full retirement age. In this article I’m going to go through • Social Security Full Retirement Age Based on Date of Birth • Social Security Earnings Test • How they assess the Social Security earnings penalty • How does Social Security refund you the penalties paid when you reach full retirement age • Other social security filing considerations Social Security Filing Strategy Video:    • Social Security Filing Strategies   Contact Michael Ruger with Questions: 518-477-6686 or mruger@greenbushfinancial.com Visit our website: https://www.greenbushfinancial.com/ Subscribe to our channel for more financial planning tips:    / @greenbushfinancialgroup   #socialsecurity #retirementplanning Frequently Asked Questions (FAQs): What is the Social Security Earnings Test? The Social Security Earnings Test applies if you claim benefits before your full retirement age and continue to work. In 2025, you can earn up to $23,400 without penalty; beyond that, Social Security withholds $1 in benefits for every $2 you earn over the limit. Does the earnings test apply after reaching full retirement age? No. Once you reach your full retirement age (FRA), the earnings test no longer applies. You can earn an unlimited amount without any reduction in your Social Security benefits. How is the Social Security earnings penalty paid? You don’t pay the penalty out of pocket. Instead, Social Security withholds full monthly benefit payments until the total amount of the penalty is recovered. Because the program only withholds full months, it may temporarily take more than the exact penalty amount. Does Social Security refund withheld benefits at full retirement age? Yes. Once you reach your FRA, Social Security recalculates your benefit to credit back the months that were withheld due to the earnings test. Rather than sending a lump-sum refund, your monthly benefit is permanently increased to reflect those previously lost months. How does the refund adjustment work? When you reach full retirement age, Social Security recalculates your benefit as if you had started payments later—reducing the early-claiming penalty. For example, if you began benefits at age 62 and had ten months of payments withheld, your benefits would be adjusted as though you started at age 62 and 10 months, increasing your future monthly payments. What factors should you consider before claiming Social Security early? Before turning on benefits early, consider the long-term impact on survivor benefits, the break-even age compared to waiting, potential taxation of your benefits, annual cost-of-living adjustments, spousal benefit eligibility, and your life expectancy.