John Smith, a 69-year-old specialist at his hospital, continues to work full-time and loves his job. He is the only one performing certain tests, and his employer wants to keep him. Smith is already enrolled in Medicare but has not started collecting Social Security retirement benefits.
Since Smith was born in January 1956, his full retirement age (FRA) is 66 years and 4 months. He reached FRA in May 2022, which means he can collect his full retirement benefit without penalty for working full-time. There is no limit on how much he can earn while receiving Social Security benefits once he reaches FRA.
He can collect Social Security now and keep working, and his benefits will not be reduced due to his job income. He will also continue contributing to Social Security through payroll taxes. If Smith decides to delay claiming benefits, his benefit amount will continue to grow.
Delaying increases the benefit by about 8% each year after reaching FRA, up until age 70. At 69, he is less than a year away from maxing out that delayed retirement credit. By waiting until he turns 70, his monthly benefit could be roughly 24% higher than it would have been at his FRA.
Smith’s Social Security options
This increase will last for the rest of his life and could potentially benefit his spouse if she later receives spousal or survivor benefits. Even if Smith starts collecting Social Security now, his benefit might still increase.
The Social Security Administration reviews earnings records, and if his recent work years are among his 35 highest-earning years, the agency could recalculate his benefit upward. He will receive a notice if his payment increases because of these new earnings. There is no one-size-fits-all answer for when Smith should claim his benefits.
If the couple wants to secure a higher monthly benefit, waiting until he turns 70 makes sense. On the other hand, if they prefer to start receiving money now, there is no financial penalty for claiming since he is already past his FRA. Factors to consider include their overall financial situation, life expectancy, how long he plans to work, and whether the additional income would meet their current needs.
At 69 and past his full retirement age, Smith has options. He can claim his Social Security benefits now without reducing his payments even if he continues to earn a full-time income. However, waiting a bit longer until he turns 70 will secure a larger monthly check for life.
Either path can be advantageous depending on what best fits their needs. Consulting a financial advisor or using Social Security’s online tools to estimate benefits might help in making an informed decision.
