I’m 63 and tried claiming Social Security early, but it was declined because I’m still working. Is that allowed?

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I’m 63 and tried claiming Social Security early, but it was declined because I’m still working. Is that allowed?

“I was told that I cannot receive any Social Security benefits as long as I am working full time and make more than the annual $23,400 guideline amount.” (Photo subject is a model.) – MarketWatch photo illustration/iStockphoto

I am 63 and decided I want to go ahead and start drawing my Social Security retirement benefits.

I am still working full time. I was told that I cannot receive any Social Security benefits as long as I am working full time and make more than the annual $23,400 guideline amount. I was also told that, as long as I work, I have to wait until I am 67 to start drawing my Social Security. Is this true?

I know a lot of people that draw benefits, are still working, and have to call in and ask the payments be stopped because they have reached their minimum amount. I understand that my benefits will be reduced given that I am not at full retirement age, but never did I think I could not draw my Social Security when I chose to because I am still working a full-time job.

Please explain in detail, because I do not understand this. I have talked to my local Social Security office, as well as calling in on the helpline. My actual benefits letter states that I am approved to draw Social Security, but at the bottom it adds, “Payments suspended because you are still working.” When did this happen??

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Claiming early while still working full time isn’t always the best strategy, and your situation is a perfect example.

Yes, it is true you can claim early. The earliest individuals can claim their Social Security retirement benefits is age 62, which will permanently reduce your benefits since you haven’t reached your Full Retirement Age, or FRA. It is also true that there is an income limit on benefits claimed early while still working, and if your earnings surpass that limit, you won’t see any of the benefits.

This puts you in a not-so-ideal situation, because you’ve basically put yourself in a box. You can’t actually see the money you’re supposed to get from Social Security, but on the record you’re claiming benefits early, so the amount you’d get if you weren’t working is permanently reduced.

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Had you waited to claim benefits until you were FRA, or at least receiving less money through part-time work or some other income scenario, you’d see more money coming in from Social Security. That is because you’d either be at or nearer to FRA, or you wouldn’t be passing the income limits set forth for people who claim and still work.

The Social Security Administration deducts — not reduces, which happens when claiming early — your benefits based on your earnings. The annual limit for people under Full Retirement Age in 2025 is $23,400. For those who will reach Full Retirement Age this year, the limit is $62,160 for the months prior to FRA. For those who will not be at FRA for the entire year, the agency deducts $1 for every $2 over the limit, whereas if you turn full retirement age in 2025, the deduction is $1 for every $3.

Here is an example: You’re claiming early and your monthly benefit should be $1,000, or $12,000 for the year. You earn $50,000, which is $26,600 over the annual limit. Because the benefit is reduced $1 for every $2 over the limit, you’ve completely surpassed the limit, so your entire benefit would be deducted. Alternatively, if you earned say $25,000 for the year, that’s $1,600 over the limit, so your benefit would be deducted by $800.

“When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you’re self-employed,” the

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. “We include bonuses, commissions, and vacation pay. We don’t count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.”

Of course, you do eventually get that money back. When you reach FRA, the agency will recalculate the benefit “to give you credit for the months we reduced or withheld benefits due to your excess earnings.”

You may be able to fix this. Social Security beneficiaries may be able to withdraw their claim if they’ve changed their minds, the Social Security Administration said. “To withdraw your claim, you must meet all of the requirements, including making the request in writing and repaying the benefits that you received,”

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. Beneficiaries can cancel or withdraw their applications up to 12 months after benefit approval.

Here’s

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on that from SSA.

If you went that route, you still would not receive benefits, but you would get more money when you finally do claim.

Call the Social Security Administration again, or make an appointment at the nearest office, to discuss your options.

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