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Just because you’ve reached the age of 65 doesn’t mean you’re ready to stop working. Beyond financial needs, Centers for Disease Control and Prevention noted that work provides social interaction and better quality of life for many older adults. These may be some of the reasons why the labor force participation rate for older workers is expected to increase by 2030.
But if you’re approaching age 70 and wondering what will happen to your Social Security if you continue to work, read on to consider some things that could impact your finances.
Now is the time to claim
Let’s get started with this clear guidance social Security Administration: If you are age 70 or older, you should apply for your benefits now. The reason is simple – waiting past 70 won’t increase your benefits.
“Most people assume that working longer hours always means bigger Social Security checks,” said Andrew Lokenath, founder of . expert in finance. “That’s where they go wrong. The Delayed Retirement Credit that boosts your benefits by about 8% a year stops at 70. So if you’re over 70 and haven’t claimed yet, file now, because waiting costs you money every month.”
Your profit from work may increase
To put it plainly, you can still receive benefits if you still work. Here’s even more good news: Your earnings can increase your monthly benefits (even after benefits start accruing).
“Your monthly benefit may increase if your new earnings exceed those from one of your previous top 35 highest-earning years,” said Marguerita Cheng, CFP, CEO. Blue Ocean Global Wealth. “In other words, your Social Security benefits could increase.”
take taxes into account
Like many areas of personal finance, experts told GOBankingRates that senior workers need to keep taxes in mind when thinking about how they can keep working after 70.
“Extra income can still affect how much your Social Security is taxed,” said Brandon Gregg, CFP, advisor. BBK Wealth Management. “Up to 85% of your Social Security could be taxed, depending on how much your income grows.”