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Howard Kossover: Taxes are not normally withheld from Social Security benefits

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Q: Since I retired, my main income is from land rent and a part-time job. Will this prevent me from receiving Social Security retirement at age 62 next year?

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A: Land rent is not a concern for Social Security annual earnings test purposes.

Only your own gross wages or net self-employment for the year is considered for the earnings test.

At age 62, you will be younger than full retirement age (FRA) so your part-time earnings might lower the amount of retirement payable depending on how much they are. 

Earnings test levels for 2014 are not yet known, but in 2013, earnings over $15,120 could affect benefits for people younger than FRA the entire year.

Earnings test information for 2013 is at www.ssa.gov/retire2/whileworking.htm.

Keep in mind that you do not need to start Social Security retirement just because you will be age 62.

Will you need the SSA income at 62?  Compared to waiting until full retirement age (FRA), starting at age 62 leaves your benefit amount permanently reduced, excluding cost-of-living changes, by about 25 percent.

In other words, a $1,000 monthly benefit at FRA of age 66 is reduced to $750 at age 62. 

Since benefits increase a small percentage with each month delayed until you reach age 70, totaling about 8 percent annually, you could delay starting Social Security in favor of a higher amount in the future. You could be retired for many years and a higher SSA benefit might be important in years to come.

The SSA Retirement Planner section at www.socialsecurity.gov/retire2/ has calculators and details to consider when making your decision.  Whatever you decide, you can complete your retirement application online. 

Did You Know?  The Social Security home page, www.socialsecurity.gov, has a whole new look with a simplified layout.  One, I have been told, designed to present a fresh, modern look and feel, reflecting current trends and best practices in web design.

The updated home page features menus to help you easily find information, rather than searching different areas of the homepage.

For example, Social Security number (SSN) card information is in the “Number & Cards” section. 

Go to the “Benefits” section to learn about Social Security (Retirement, Survivors & Disability), Medicare and Supplemental Security Income (SSI) benefits.

Based in Grand Forks, Howard I. Kossover is the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Send general interest questions to him at howard.kossover@ssa.gov. Read his online articles at socialsecurityinfo.areavoices.com.

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