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Going Back to Work can Boost Social Security Payments
Q: I started my Social Security when I was 62. I'm now 64 and have been offered a job that I am seriously considering. It would pay me quite a bit of money — way more than the Social Security earnings limit of $14,000. Can I stop my Social Security benefits? If I do, when I restart them, will I get credit for my additional earnings?
A: Yes, you can stop and restart your Social Security benefits at anytime. And when you restart your benefits, there are two potential increases you would be due.
THE FIRST INCREASE
As you alluded to, your benefit will be increased because of additional earnings added to your Social Security record. This is an automatic benefit recalculation the Social Security Administration does every year on the accounts of those beneficiaries who are still working.
When you have additional earnings, and assuming they are higher than the lowest year that was used in your current Social Security computation, they replace that low year with the new higher year. This would boost your overall average income and, in turn, increase your Social Security benefit. Usually, these additional earnings recalculations add about $20 or $30 per month to your Social Security check.
THE SECOND INCREASE
Once you restart your Social Security, your benefits will be refigured to remove some of the early retirement reduction that was factored into your original computation.
When you first took your Social Security at 62, those benefits came with somewhere between a 20 and 25 percent reduction. If you suspend your Social Security payments, and then restart them later on, your benefit amount will be readjusted to give you credit for those months when you didn't collect Social Security benefits.
In other words, if you return to work and are not collecting an early retirement Social Security check, why should you continue to be penalized with a full early retirement reduction? The reduction factor is about one-half of 1 percent per month.
One other reminder: If you keep working until age 66 or beyond, you should make sure you restart your Social Security at age 66. That's because at that age, you are due full Social Security benefits no matter how much money you are making.
Q: In a prior column, you wrote that a woman could not get any of her deceased husband's Social Security until she is 60 years old. But is there a difference if the deceased was disabled? My sister's husband recently died. He was getting Social Security disability benefits. My sister is 52. Is she due any of her husband's Social Security now?
A: The same rules I discussed in the prior column apply to your sister. So, she must be at least 60 years old to qualify for Social Security widow's benefits. There are no special provisions because her husband was disabled.
If your sister is disabled, then she could be eligible for disabled widow's benefits. They are payable as early as age 50.
And you didn't mention any children. A woman who is caring for her deceased husband's minor children can qualify for Social Security widow's benefits at any age.
Q: My husband is terminally ill. We have one son — age 10. Our son has cerebral palsy. When my husband dies, will my son get Social Security disability benefits?
A: Your son will get a "surviving child" benefit on your husband's Social Security record. He gets that benefit just because he is a minor child, not because he is disabled.
However, when he turns 18, his disability will become a factor. Normally, children's benefits stop at age 18. But they can continue indefinitely for a child who is disabled.
And by the way, you would be due widow's benefits as the mother of a minor child receiving Social Security survivor's benefits.
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