Dear Rusty: I am 64 years old and still working full time. My question is: when should I start receiving my Social Security? I would like to start it in January 2024 and go part time at work, but would I be losing much Social Security by not waiting until full retirement age?

Signed: Trying to Plan Ahead

Dear Trying to Plan: You are smart to evaluate the impact of claiming your Social Security (SS) benefits early. First, be aware that your full retirement age (FRA) for Social Security purposes is 66 years and 8 months, and that is when you get 100 percent of the SS benefit you’ve earned from a lifetime of working.

It appears you already know that if you start benefits before your FRA, you’ll be subject to Social Security’s “earnings test” which limits how much you can earn from working before losing some of your benefits. But if you go part time at work, you can mitigate the earnings test and claim your benefits early — just understand that your payment will be permanently reduced by doing so.

If you claim your benefits to start in January 2024, you’ll be taking your Social Security about 18 months early, which means that instead of 100 percent of your FRA entitlement you’ll get about 90 percent (a reduction of 10 percent). The earnings test will still apply, and we don’t yet know what the 2024 earnings limit will be, but it will be something more than the 2023 limit of $21,240. If your 2024 earnings exceed the annual limit, the Social Security Administration (SSA) will take away $1 in benefits for every $2 you are over the limit. The SSA takes away benefits by withholding future payments until it recovers what you owe for exceeding the limit. If you work part time and don’t exceed the 2024 annual earnings limit, there will be no penalty and you will get every month’s SS payment. If you find you will exceed the annual 2024 earnings limit, you can call the SSA and inform the agency of that and by how much, and it will suspend your benefits for the number of months necessary to avoid overpaying you. If you don’t inform the SSA and you exceed the annual 2024 limit, it will catch up in 2025 when it gets your 2024 earnings info from the IRS and issue an overpayment notice — requiring you to pay back the amount owed (half of what you exceeded the 2024 annual limit by). As you likely know, the earnings test no longer applies after you reach your full retirement age.

So, the decision on when to claim your Social Security benefits is yours to make, and you are smart to consider your work plans — but should also consider your life expectancy and marital status. If you are married and eventually die before your lower earning spouse, your spouse’s benefit as your survivor will be based on your benefit amount at the time of your death. Thus, your age when you claim your benefit may also affect your spouse’s benefit as your survivor. The longer you wait (up to age 70) the more your spouse’s survivor benefit would be. And if you enjoy at least average longevity, which is about 84 for a man your current age, then by waiting until your FRA or later to claim you’ll not only get a higher monthly payment, but also get more in cumulative lifetime benefits. If, however, your financial circumstances are such that you need the SS money sooner, then claiming earlier may be the right decision, provided you don’t substantially exceed the annual earnings limit prior to reaching your full retirement age. I hope the above provides what you need to make an informed decision.                        

Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: ssadvisor@amacfoundation.org.

 Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.