Can Someone Who is Receiving Social Security Benefits Continue to Work and Pay into the System in Order to Receive More Benefits Later on?

Yes, individuals receiving Social Security benefits can continue to work and contribute to the system. However, there are certain restrictions and considerations that must be taken into account. Let us break down these factors and explore how continuing to work can impact your benefits.

Working and Earnings Limits

At full retirement age (currently 66 or 67 years), individuals can work full-time without losing any benefits. If someone is receiving benefits and works fewer than 45 hours a month, their benefits will not be reduced for that month. If they earn more than 20 hours a week, however, Social Security deductions may apply. If your monthly earnings exceed $1,650 (as of 2023), a portion of your benefits will be withheld until you reach the full retirement age. This cap may not directly increase your benefits, but it ensures that you do not face penalties.

Impact of Continued Earnings on Social Security Benefits

Continuing to work has a limited impact on Social Security benefits. Social Security pays benefits based on the highest 35 years of earnings. If you continue working and earning more in a year that has already been considered, SSA will recompute your benefits. However, the benefits will not significantly increase because every year worked only adds to the historical earnings slightly. For instance, if you have worked for two years, your monthly benefit may increase by around $12 or $18.

Additionally, if you start receiving Social Security benefits at 62, you are subject to a limit of 20 hours per week of work to avoid benefit deductions. By waiting until the full retirement age, you can work without any restrictions, but the benefits will still be based on your 35 highest years of earnings.

Survivor Benefits and Continued Work

Surviving spouses who receive survivor benefits can continue to work and may see benefits adjust based on their earnings. For instance, if you received partial benefits due to your full-time work at 58 and later switched to full benefits at 62, your ongoing work can contribute to a future adjustment in your benefits. By working, you might qualify for a full benefit amount once you reach the full retirement age.

Conclusion

Continuing to work while receiving Social Security benefits has its benefits and limitations. While it may not drastically increase your benefits, it can help you avoid deductions and potentially qualify for a higher benefit amount later. It is advisable to understand the specific rules and calculate your potential earnings to make informed decisions about your work and retirement planning. Consulting with a financial advisor can also help you explore other savings or investment opportunities to further maximize your benefits.