I have a 61-year-old friend who has worked and paid into Social Security for 40 years and plans to continue working until age 70. She heard that she can start collecting benefits at her full retirement age (FRA), 66 years and 2 months, and continue working and paying into Social Security. If she does that, will it affect the amount she’ll collect at age 70? She’s concerned that if she starts collecting at her FRA, it will decrease her projected benefit at age 70.

Your friend’s projected benefit at age 70 is the amount she’ll get if she postpones filing for Social Security until 70. That amount includes four years of 8 percent annual credits for delaying her application after her full retirement age.

If she takes Social Security at her FRA, she won’t receive those extra credits. Continuing to work at a higher salary may eventually increase her benefit, depending on what she earns. But it won’t be as big as if she takes it at 70.

At her FRA, she could work while collecting her full benefit regardless of the amount she earns. (A younger person can’t do that: In 2017, people under FRA who collect Social Security while working forfeit $1 of benefit for every $2 they earn above $16,920. Those who’ll reach FRA in 2017 forfeit $1 in benefits for every $3 they earn over $44,800 before their birthday month.)

But she should ask her tax accountant how collecting a full benefit while she’s still working would affect her tax bill. If she doesn’t actually need Social Security to cover her expenses while she’s still working, her best financial strategy may be to delay collecting it until she retires from her job.

THE BOTTOM LINE Collecting a Social Security benefit while you work involves potential trade-offs.

WEBSITES WITH MORE INFORMATION

ssa.gov/planners/retire/whileworking.html

ssa.gov/planners/retire/1943-delay.html

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