How Much Money Can You Make After You Retire?

How Much Money Can You Make After You Retire Before Your Benefits Are Reduced? 

Financial and Retirement Planning Information - 
for Beginners

When a person retires, we think of them as no longer working. In today's climate, however, many people continue to work, or return to work after they "retire". They may be doing the same thing they did before they retired, or they may be doing something entirely new.

So... if a person retired, why on earth would they go back or continue to work? There are many reasons, but the main ones are: lack of money and boredom.

Many people thought it would be so nice when they no longer had to work, but once that became a reality, they found it wasn't so nice after all. What can you do around the house for the 9 to 10 hours a day that you used to be gone? You can only nap so much. You can only visit your friends so often.

You can only go shopping so much. Well, you could do some of those projects that you said you would do "some day", but eventually you will run out of things to do. Now what? Go back to work! You can pick up some extra money and fill those long hours at the same time.

You can go back to your former line of work, or you can find something new to do. Maybe your job was welding, but you always liked working in the dirt. Maybe you could go to work as a gardener or a landscaper.

You might like to teach and could hold some classes in your former field. Who would know more about that job than you?

Too many people are forced to go back to work, whether they want to or not because of finances. Maybe you had all of your retirement funds tied up in the stock market. Perhaps you just didn't save enough and can't afford to live on social security alone. Maybe you have enough saved to live on, but you have a lot of outstanding debts that you have to spend your savings on, or you have a lot of unexpected medical bills, or your wife ran off with the guy next door and took all of your money with them.

Whatever the reason, you now find yourself in a position where you have to work. So how much are you allowed to make while drawing social security before you are penalized?

  

The Social Security Administration (SSA) uses the formulas below, depending on your age, to determine how much your benefit must be reduced:

Full Retirement Age (FRA):  Age 66 and 6 months for people born January 2, 1957 through January 1, 1958.  Unlimited earning.  Do deductions on any amount you earn.

If you are under:  normal (or full --  retirement age (FRA) when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2019 that limit is $17,640. Remember, the earliest age that you can receive Social Security retirement benefits remains 62 even though the FRA is rising, but your benefits will be greatly reduced at ages 62 to FRA.

In the year you reach your FRA: $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2019, this limit is $46,920.

Starting with the month you reach FRA:, you will get your benefits with NO limit on your earnings.

If a child or spouse on your record works while receiving benefits, the same earnings limits apply to him or her as apply to you. If your child or spouse is eligible for benefits this year and is also working, you can use our earnings test calculator to see how those earnings would affect the child's benefit payments. (Your child's or spouse's earnings affect only his or her own benefits. They do not affect your benefits or those of any other beneficiaries on your record.)

If you retire during the year:

When entitlement to benefits begins or ends during the year, many people work in months before or after entitlement. $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2019, this limit is $46,920.

For complete details see:  How Work Affects Your Benefits


Note: There are different rules for people receiving Social Security Disability:


See:  Substantial Gainful Activity for details.

What Are You Doing About Your Finances and Retirement? How to Plan

What Are You Doing About Your Finances and Retirement?  How to Plan

Financial and Retirement Planning Information - 
for Beginners

Now is the time to make your retirement plans and to get ready as early in life as you can.

Don't wait until you are 50 or 55 years old to start thinking about retirement -- that is too late. You need to start thinking about retirement on the day you make your first dollar.

Too many people put off retirement planning until they are in the late 40's or 50's because they have children and bills and they think they can't afford to save when they are young. Even if you save only $5.00 a week at 3% interest, compounded monthly, you will have about $20,000.00 at age 60 if you start at age 20. There are plenty of retirement planning calculators online to help you achieve your goals.

Unfortunately many people today have saved all of their lives and suddenly find themselves broke. The stock market crash has ruined thousands or maybe even hundreds of thousands of people's lives.

Far too many people can't retire because they lost all of their money in the stock market or 401K's.

If a person is in their early 50's or younger, then they have time to wait for the market to recover -- which it has always done. Of course, there is no guarantee it will this time, but if it doesn't, it won't matter much as we will have a lot more to worry about than just retirement.

But we have to remember, as bad as the economy seems to us today, it is nothing compared to the great depression of the 1930's. We just feel like it is so bad, because unless you are over 70, we have been spoiled all of our lives, and have never really had a hardship.

You may have been living from paycheck to paycheck, and barely making ends meet, and now you find yourself out of a job. Or perhaps, you are still working, but don't know for how long.

You may have a lot of credit card debt, a mortgage, two car payments, and kids in school.

How are you going to make that house payment and car payment and still be able to eat?

You might be thinking you have a good FICO score, and a large line of credit, so you will just borrow money to tide you through the bad times. What if the bad times last longer than expected. What will you do then? How will you pay back your new debt as well as your previous debt?

If you find yourself barely able to make ends meet, you should consider consumer credit counseling. You also need to think about another way to make money. Is your spouse working? If not, they could get a job. You could also get a second job, maybe part-time.

You could try consolidating credit card debt and loans, and that would help some. You might want to consolidate credit cards into one new loan and all other loans into a separate debt consolidation. Or you might try just a student loan consolidation, if you have a lot. When you do it that way you won't be paying off your credit card and mortgage for the same length of time.

If you do decide to have only one loan consolidation, don't make a mistake a lot of people make: roll in very small amounts. For instance, you owe $100,000.00 on your house, you just purchased a $40,000.00 car, you owe $20,000.00 on a student loan and you have $500.00 left on a loan you took out to repair your old car before you traded it in.

The tempting thing to do is to roll $160,500.00 into a consolidated loan. Sounds good, right? Get rid of all of your bills and just have one payment! Stop and think a minute. You still owe $500.00 for repairs on a car you don't even own anymore, now you want to add that to a 30 year loan at 7% interest? Do you realize if you do that, you will be paying 7% interest on that $500.00 for 30 years! That $500.00 could end up costing you about $4000.00. Go ahead and consolidate the other loans, but pay off that $500.00 separately. There are a lot of ways to make money, especially a small amount. Stop and think.

Let's see, you could have a yard/garage sale. Or just sell a second or third vehicle you don't use a lot. Find all the junk in your house and put it on eBay. Do you know someone who delivers newspapers? Volunteer to do their deliveries while they go on vacation. You can pick up a few bucks, but you aren't committed to a job forever. Mow yards, shovel snow, walk some dogs. Get a part-time job as a delivery person. That has a very high rate of turnovers.

There are a lot of ways to earn money, but if all else fails, maybe you will have to cut back on your expenses.

Just know that you are not the only one with debt problems. Almost everyone today is in the same boat, but given time, we will pull through, and before you know it, your finances will be in good shape again and you will be all ready to enjoy your retirement.