How Work Impacts Social Security Benefits

Employment after retirement can change the amount of your Social Security benefits.

By + More

Suspend payments. Some workers claim Social Security benefits after a job loss or trial retirement, but later decide to go back to work. There is no penalty for working and claiming Social Security benefits at the same time after your full retirement age. But there is another option to boost your Social Security payouts. Those over full retirement age can voluntarily suspend Social Security payments, which will allow you to earn delayed retirement credits and permanently increase future monthly benefits.

[See 12 Ways to Fix Social Security.]

Taxes on benefits. You may have to pay federal income taxes on your Social Security benefits if you earn too much. If your adjusted gross income, nontaxable interest, and half of your Social Security payments add up to more than $34,000 ($44,000 for couples) in 2010, you many have to pay federal income taxes on up to 85 percent of your Social Security benefits. If that sum adds up to between $25,000 and $34,000 and ($32,000 and $44,000 for couples) this year, you could be taxed on up to half of your entitlement checks.