Social Security & Medicare Questions

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Social Security & Medicare Questions

Answered by Mary Johnson, Editor

Q: Your working after retirement story on the TSCL website is not entirely correct. The example of John D. age 64 with a limit of $10,800 in "Working After Starting Social Security" is misleading. As in my case, a person age 64 in the year of their 65th birthday, the limit is $25,000 with a 3 for 1 reduction for the months before the 65th birthday. I find many, many, many 64 year olds do not know this. Your example certainly does not reflect this revised law. How did you miss this? -- J.E.

A: For the purposes of our article, "Working After Starting Social Security," our example assumes that John D. remains age 64 through the end of 2001. You do however, have a very important tip.

Last year Congress passed the Senior Citizens Freedom to Work Act of 2000. Individuals who have attained full retirement age (age 65 in 2001) are no longer subject to a limit on the amount they can earn before retirement benefits are reduced. The year in which one turns 65, however, the former age 65-69 limits continue to apply to earnings that are for the months prior to when full retirement age is reached. As you point out, that limit in 2001 is $25,000. An age 64 beneficiary who turns 65 in 2001 can earn $25,000 instead of only $10,680. Income over the annual exemption amount will reduce benefits $1 for each $3 in excess.

Many 64 year olds may not know about this rule because it is not widely understood nor publicized. Indeed the Advisor office only learned in April how the rule would apply when we received our 2001 Social Security legal guide. Thanks for the heads up!

If you would like to read more Social Security and Medicare Questions click here: http://www.tscl.org/MedicareandHealthQA.asp

Your Social Security Questions Answered Online

Social Security has answers to your questions online. You’ll find them in the 2001 Social Security Handbook in a question and answer format. You can view online or print out a copy for your reference, but arm yourself with a ream of paper before you start-the Social Security Administration says you’ll need it. www.ssa.gov/OP_Home/handbook/ssa-hbk.htm For those without Internet access, call Social Security toll free 1-800-772-1213.

August 2001

This article first appeared in Volume 6, Issue 9 of `The Social Security and Medicare Advisor` newsletter (September 2001). To receive future editions of `The Advisor` in its special, free e-mail version, please click here.