Dear Dr. Don,
I took a Social Security spousal benefit on my wife's work record at my full retirement age of 66. I still have a full-time job. I will be 70 March 23, 2013. I realize I can get no further credits past age 70. However, are there any negatives to taking my benefits at 70 in view of my intention to keep working until 75?
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Do I have to wait until my 70th birthday before filing in order to receive the maximum benefit, or will it be effective Jan. 1 of the year I turn 70.
-- Bill Benny
There's no downside if you take Social Security at age 70 while you're still working. Prior to your full retirement age, you would have reduced your benefits if you filed for Social Security, kept working and earned more than the annual limit. (For other readers, that limit is $14,640 in 2012.) That's not a concern once you're past full retirement age.
Part of your Social Security benefits may be considered taxable income, depending on your filing status and outside income, so the benefits could put you in a higher income tax bracket when they're added to income from a job.
But no one pays federal income tax on more than 85% of his or her Social Security benefits, based on Internal Revenue Service rules.
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You earn delayed retirement credits each month that you wait to file for benefits after your full retirement age. If you file for benefits in the year you turn 70 but before your birthday, you won't maximize the delayed retirement credit. You're only a few months away from turning 70, and you have your income from working, so I'd suggest waiting. The Social Security Administration advises people to file for benefits three months before they want their benefits to begin, so you don't have to wait until your birthday to file.