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Age 65 has traditionally been when most people retire. In recent years, working past your mid-sixties is becoming more and more common. Working past 65 has many benefits, like continued income and employer-sponsored health insurance, but it could impact your Social Security and Medicare entitlements. If you’re planning on working past retirement, here are some helpful ways to plan so that you can make the most of your federally sponsored benefits.

Social Security

Depending on your birth date, your “full” retirement age ranges from 65 to 67. You can start receiving Social Security benefits as early as age 62, but the amount will be reduced from what you’d receive at full retirement age. Anything that’s withdrawn early above the current annual amount of $17,040 will be penalized $1 for every $2 that’s taken out.

If you can, you should consider forgoing your benefits until age 70, which is when you’ll reach your maximum eligible amount. By delaying your benefits, you’ll receive a bonus percentage depending on how long you wait past your retirement age. Waiting longer than that isn’t advisable since the bonus calculations stop after age 70.

It’s important to note that if you continue to work and withdraw Social Security benefits, up to 85% of your benefits may be subject to income tax depending on your earnings. Also, you’ll pay Social Security and Medicare taxes on any income you earn regardless of whether you’re withdrawing benefits or not.


You’re automatically eligible for Medicare the year that you turn 65. There are four types of Medicare coverage:

• Medicare A: covers hospital and nursing home stays, but not doctor’s fees
• Medicare B: general medical coverage like doctor’s visits, lab tests, and x rays
• Medicare C: supplemental medical insurance through private insurance plans
• Medicare D: prescription drug coverage

It’s a good idea to sign up for Medicare A as soon as you’re eligible, since it’s free and provides additional insurance coverage even if you have a plan through an employer. Parts B and D do have premium costs and are usually used as standalone plans if you’re not covered by an employer. You can also delay signing up for B and D until you’ve stopped working. Part C can subsidize your existing insurance and sometimes includes additional benefits like dental, vision and prescription coverage.

Whether it’s to have more financial security or simply because you enjoy it, working beyond retirement can have many benefits. While working past retirement can have an impact on your tax obligations and benefits eligibility, it’s typically less complicated than it seems. To make sure that you’re choosing the best path for you, contact Cray Kaiser today.

For various reasons, many people continue to work while collecting Social Security retirement benefits. Some people need the additional income while others simply enjoy keeping busy. Per the Social Security Administration, SS benefits represent about 30% of the income of people over age 65. Whatever the reason, there are important tax implications to consider should you choose to work while receiving Social Security benefits.

Potentially Reduced Benefit Amount

You can start collecting Social Security retirement benefits at age 62, but full retirement age is between 65 and 67, depending on your birth year. People age 65 and younger who work while collecting Social Security will have their benefits reduced by $1 for every $2 they earn over $21,240 in 2023.

If you reach full retirement age in 2023, your benefits will be reduced by $1 for every $3 you earn over $56,520 in the months before you reach full retirement age (depending again on your birth year). For these purposes, earnings include gross wages from a job, or net earnings if you are self-employed. It does not include pensions, annuities, investment income or other retirement benefits. Starting with the month you reach full retirement age, your benefits will not be reduced no matter how much you earn.

Keep in mind that the amount of the benefit that is reduced while you are working is not gone forever. Once you reach full retirement age, it will be returned to you over time in the form of a slight increase in your monthly benefits.

Benefits May Be Taxed

Your earnings in retirement also affect the amount of benefits subject to income tax. If your “combined income” (including adjusted gross income, tax-exempt interest and half of your Social Security benefits) exceeds $25,000 as an individual or $32,000 for a married couple filing jointly, you may have to pay federal income taxes on as much as 85% of your benefits.

Imagine what your ideal retirement looks like. Do you see yourself spending a lot of time at the golf course? Volunteering? Babysitting your grandchildren? Or, maybe you’d prefer to continue working because it energizes you and gives you purpose. Ultimately, the decision is up to you. If you need any assistance, we’re here to help. Please contact us if you have any questions about Social Security benefits or retirement.