Brenner answers questions about all aspects of family finance.
I started receiving Social Security at 62. Now, at 64, I have an opportunity to work as a consultant for a year or more. I'm aware there's a Social Security limit on my earnings, but is the amount of benefit I forfeit permanent or just for the time I'm earning over the limit? Is there a way for me to suspend Social Security distributions while working?
If you work after you begin collecting Social Security, you may temporarily forfeit some of your benefit, depending on your age and the amount you earn.
People who keep working after filing for Social Security forfeit $1 of benefit for each $2 they earn above $15,120 until the year they turn 66. That year, they forfeit $1 of benefit for each $3 they earn above $38,880 until their birthday month. From then on, they don't forfeit any benefit, regardless of how much they earn.
After you turn 66, your benefit will be recalculated to make up for what was withheld because you exceeded the annual earnings limit. The recalculation also will take your extra year of work into account, so your stint as a consultant might result in boosting your basic benefit as well.
Meanwhile, you should call the Social Security Administration and tell them you plan to return to work and what you expect to earn, says Jane Zanca, an agency spokeswoman. If your Social Security benefit is $24,000 a year, for example, and you report you'll earn $5,000 above the annual limit this year, your benefit payment for the year will be reduced by $2,500 ($1 for each $2 you make above the limit). It's the automatic equivalent of a partial suspension.
The bottom line: The Social Security earnings cap disappears when you reach your full retirement age.