Irrespective of whether a person is receiving any social security benefit, continuing to work after the age of 62 affects one’s entitlement to social security benefits. So knowing how does working after 62 affects your social security benefits might help one decide whether to continue working and when to claim the benefits.
Individuals can claim the social security retirement benefits after turning 62. However, with every passing year, the benefits increase until a person reaches 70. There’s no extra benefit for postponing the claim of benefits after 70. Also, if you claim benefits and continue to work after 62, the level of benefits is expected to increase.
Social security retirement benefits calculation process
To find out the social security retirement benefits, a person’s highest income period of 35 years is considered. If an individual hasn’t worked for 35 years straight, $0 would be added for every missing year. Once you turn 62, your benefits are recalculated every year, until you claim them. Your latest income is added to your lifetime earnings. That’s how 35 years of the highest income are selected.
Factors affecting social security retirement benefits
Usually, people earn less at the start of their careers. If you work for another year and earn more, the last year’s income would be considered while calculating, indicating that the level of benefits gets comparatively increased. But, if you have already experienced 35 years of high earning, working after 62 would have negligible influence on your social security benefits. The monthly increase would be determined by calculating the number of low-earning years that higher-earning ones replace.
Also, the individual’s income level plays a significant role. For instance, if you are an employee with high earnings, working after 62 would hardly increase the monthly benefit by a dew dollars. On the other hand, earning a higher income would significantly increase your retirement benefits if you come from a lower rank.
But, before retirement, if a person earns ” too much,” the concerned individual’s benefits would be reduced, though temporarily.
Thus, it’s evident that the social security retirement benefits calculation is a dynamic, annual process. It’s an automatic procedure that’s influenced by a lot of conditions and factors.