Social Security: Higher wages hurt benefits

When you retire, it’s usually a time to relax. This isn’t the case for many, and higher wages can impact your Social Security payments.

cash with a social security card and government check representing social security benefits

While earning a higher wage is ideal, so is cashing in on your full retirement.

By working and earning more, you could be losing some of your benefits.


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Here is how higher wages negatively impact your Social Security payments

If you’re retired and still earning too much, the government may keep some of your Social Security.

This is for people who have retired, but have not yet reached their full retirement age of 66-67.

For 2022, if you do not turn 66-67, or whatever your full retirement age is, $1 will be held for every $2 made past $19,560.

If you do hit FRA in 2022, it will be $1 for every $3 made over $51,960.


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If you make too much money overall, you could lose your checks entirely.

You could make that money back later on when you hit FRA and your benefits are bigger from working,. Making the full amount you lost back isn’t guaranteed.

If you make too much, another negative impact is that your benefit may be taxed and reduced.

If you make over a certain amount, your benefits may be taxed at the state and federal level.

States vary on whether they choose to tax a person’s Social Security benefits.


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Federally, the IRS maintains the same rules on federal taxes every year.

If your wages plus Social Security benefits go past $25,000 for singles and $32,000 for married couples, you’re going to get taxed.

The higher your wages the higher your taxes, and they could reach as has as 85% of your benefits.

50% of retirees have their benefits taxed.