Don’t Get Pinged by the Social Security Earnings Limit

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By Dana Anspach via

I’d like to introduce you to Peggy. Born in 1956, Peggy will be 62 in 2018. She has worked in retail her whole life, the past twenty-five years spent in management. Peggy divorced from her husband 14 years ago, is still single and has no children.

According to the Social Security Administration, Peggy’s Full Retirement Age (FRA) will be age 66 and four months which is when she will be entitled to full Social Security retirement benefits. FRA is a government set limit that varies based on your year, month and day of birth. FRA is gradually rising, and for those born on the second day of 1960 or later, FRA is 67.

The Social Security administration permanently reduces your monthly benefit amount if you begin benefits before reaching FRA. Also, if you are still working, prior to FRA something called the Social Security earnings limit applies.

Because Peggy is feeling the aches and pains you’d expect after decades in retail, she is exploring the possibility of dialing back her work hours and starting to collect Social Security benefits early at age 62, four years before her Full Retirement Age.

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