Can I Collect Social Security and Still Work?
A Strategic Guide for High-Earning Investors
For successful professionals and business owners, the decision of when to claim Social Security is about more than just your age. It's about ensuring your timing and benefits align with your overall financial plan. You may be asking, "Can I collect Social Security while I'm still working?" The answer is yes—but the rules can be complex.
Understanding how your earnings impact your benefits is crucial for making a decision that complements your long-term goals and strategy.
Fisher Investments can provide a comprehensive analysis to help you navigate this choice and make informed decisions for your financial future.
Personalized consultations are available for investors with $1,000,000 or more in investable assets.
How Working Affects Your Social Security Benefits
The Social Security Administration (SSA) has an earnings test that applies only to those who claim benefits before their Full Retirement Age (FRA) and continue to work. If your earned income exceeds a certain limit, the SSA will temporarily withhold a portion of your benefits.
If you are working and under full retirement age, the SSA withholds $1 in benefits for every $2 you earn above the annual limit.the SSA withholds $1 in benefits for every $2 you earn above the annual limit.
In the year you reach Full Retirement Age, the rules become more lenient for workers. The SSA withholds $1 for every $3 you earn above a higher annual limit—and it only counts earnings before the month you reach your FRA.
Once you reach Full Retirement Age, the earnings test no longer applies. You can earn any amount from work without your Social Security benefits being reduced.
It is important to note that these withheld benefits are not permanently lost. The SSA recalculates your benefit amount at your Full Retirement Age to give you credit for the months your benefits were withheld.
A Strategic View for Affluent Investors
For an affluent investor who is still working, the choice to claim Social Security early requires careful consideration.
Consider the following when making your decision:
The Impact of High Earnings: As a high earner, you will likely exceed the earnings test limits. This means your Social Security payments would be significantly reduced or even withheld entirely if you claim before your Full Retirement Age.
Taxation of Benefits: Your earned income, combined with your other investment income, will almost certainly make a high percentage (up to 85%) of your Social Security benefits taxable. See Are Your Social Security Benefits Taxable? for more.
The Opportunity in Delaying: The most powerful strategy for many high earners is to delay claiming benefits until age 70. By doing so, you avoid the earnings test completely and lock in a much larger monthly payment for the rest of your life. This maximized benefit can then serve as a strong source of retirement income, allowing your investment portfolio to grow more effectively.
A comprehensive analysis can help model how your current earnings, future benefit amounts and portfolio withdrawals will interact, allowing you to make an informed decision about when to start claiming your benefits.
How Fisher Investments Can Help
You don’t have to navigate the complexities of timing your claim alone. Our team of professionals can help:
Determine Your Optimal Claiming Age: We analyze your complete financial situation—including your current income, investment portfolio and long-term goals—to identify the claiming strategy that maximizes your lifetime benefits. See When Is the Best Age to Take Social Security? for more.
Integrate Benefits With Your Portfolio: We design a withdrawal strategy that coordinates your Social Security income with distributions from your other accounts, creating a cohesive plan tailored to your unique situation.
Manage Your Entire Financial Picture: We provide ongoing portfolio management and financial guidance to help ensure you stay on track to reach your long-term goals.
