Brenner answers questions about all aspects of family finance.
I just began collecting unemployment insurance. I'll be 62 in October. Can I collect both unemployment insurance and Social Security? Does unemployment insurance count as wages for the Social Security earnings test? I know if I work and earn more than $15,000, Social Security will take 50 percent of any earnings above $15,000.
No, no! Nobody will take your earnings. You've misunderstood the test.
If you work and collect Social Security at the same time, you forfeit $1 of benefit for each $2 you earn above $15,120, but only until the beginning of the year in which you reach full retirement age. Then you forfeit $1 of benefit for each $3 you earn above $40,080 until your birthday month. At that point, you can collect your entire benefit no matter how much you earn -- and your benefit amount is recalculated to make up for what you forfeited earlier.
Here's an example: Let's say you start Social Security at 62. That's four years before your full retirement age, so your benefit is reduced. Say your benefit is $800 a month, or $9,600 a year. You keep working one more year, earning $23,120 -- $8,000 above the $15,120 limit. Social Security withholds $4,000 of your benefit, so that year you collect $5,600.
When you turn 66, your benefit will be recalculated. For example, if the total amount you forfeited is the equivalent of 12 months of Social Security, your benefit now will be calculated as if you'd started collecting Social Security at age 63 instead of age 62. The result: Your benefit amount will be increased.
Social Security doesn't treat unemployment insurance as earned income; it won't affect your benefit. In a few states, collecting Social Security can make you ineligible for unemployment insurance, but New York isn't among them.
The bottom line Collecting unemployment insurance has no effect on your Social Security benefit.
TO ASK THE EXPERT: Send questions to Ask the Expert / Act 2, Newsday Newsroom, 235 Pinelawn Rd., Melville, NY 11747-4226, or email firstname.lastname@example.org. Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.