Ask the Expert: How working in retirement affects Social Security benefits

I'm 68 years old. I took Social Security at age 62 when I retired. At 67½, I started a new job with a good salary. I probably won't stay more than one year. Does this affect my benefits?

Your salary won't affect your current benefit because you're over your full retirement age, or FRA. People who are under FRA and work while collecting Social Security temporarily forfeit some benefit if their salary exceeds an annual limit. (This year the limit is $46,920 for people reaching FRA in 2019, and $17,640 for people who reach FRA after 2019.)

But your current salary might boost your future benefit check. Read on.

I'm working part time until my husband retires. For many years when I was raising my children, my annual earnings were $0. Will my current work have any effect on the benefit I could receive at 66?

Yes.

The formula that determines your Social Security benefit crunches 35 years of your earnings history. If you worked for 40 years, it uses only your 35 highest-paid years. If you just worked 15 years, it counts 20 years of zero dollars

As long as you work, the Social Security Administration automatically recalculates your benefit every year. That recalculation can increase your benefit if your 2019 earnings replace an earlier year of lower earnings (or zero earnings) in the formula's 35-year calculation.

Two caveats: This may mean only a few dollars more. And you don't get it immediately. Any increase you're entitled to based on your 2019 earnings won't be paid to you until December 2020; but it will be retroactive to January 2020.

The bottom line

Your Social Security benefit is recalculated every year that you're in the workforce. Even a part-time job in retirement may boost your future monthly check.

More information

ssa.gov/planners/retire/whileworking.html

ssa.gov/planners/retire/stopwork.html