29 Oct 2021 Social Security Benefits Changes
It’s no secret that Social Security benefits are one of the best aids available for those about to enter their retirement years. The complications that are present when working after claiming benefits are incredibly important to understand and how you can avoid them is just as important. That being said, for those who will be remaining to work while filing for their Social Security benefits in 2021, we have some good news for you. The Social Security Administration implemented some new changes for the year 2021 and these are great additions that all Americans relying on Social Security will be happy to see and experience. Let’s go over them now.
For 2021, if you have not yet reached your full retirement age (FRA), $18,960 is the threshold or income limit in which you can not surpass. If you are to go over this limit, unfortunately your benefits will be receiving a cut. On the bright side, for 2021 the limit for each year has been set to $50,520 for those who will be reaching their full retirement age. This is a 166% increase in comparison to those who are not reaching their FRA.
With that in mind, if you are to exceed this limit and go over the limit set in place, for every three dollars over the limit your benefits will be cut by one dollar. This used to be for every two dollars over the limit, your benefits were cut by one dollar. This is not to fear though, your income limit is much higher and way more manageable to deal with.
With all of this put into perspective, you are now able to possess a large income from your work while moving towards your retirement age and not have your benefits be cut with this much larger limit put into effect. Let’s say that you do perhaps go over this income limit, your benefit payments will then be readjusted whenever you do reach that full retirement age. You then can start to receive larger payments because the benefit cuts that were made will be readministered to you at a later point.
This is extremely important to be aware of because not always do you make those full payments back. Some retirees may not live long enough to receive all these payments and up losing out on that money they could have been receiving. This is a different scenario from person to person, but it is something to just be aware of.