2-Minute Money Manager: Can I Increase My Social Security After I Retire?

Photo by stockfour / Shutterstock.com

Welcome to your “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is on a popular topic: Social Security. It involves whether you have to continue paying into Social Security if you keep working after reaching full retirement age — and if you do, whether that could lead to bigger monthly checks.

The answers are interesting. Click on the video, and you’ll see what I mean. Or, if you prefer, scroll down to read the full transcript and find out what I said. You also can learn how to send in a question of your own below.

For more information on this topic, check out “12 Ways to Maximize Your Social Security Checks” and “5 Ways to Avoid Paying Taxes on Your Social Security Benefits.” You can also go to the search at the top of this page, put in the words “Social Security” and find plenty of information on just about everything relating to this topic.

Finally, if you’d like to explore claiming strategies that could result in bigger monthly checks, visit the Social Security page of our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this question is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Let’s get to today’s question. It comes to us from Victor:

“If I work after retiring at full retirement age, I’ll still pay Social Security taxes, right? Will that additional Social Security tax result in any recalculation and increase in my future Social Security benefit?”

So we’re all on the same page, let’s start by defining “full retirement age.” That’s the age at which you’re eligible for your full Social Security retirement benefit. For most of us, that age is around 66. For example, I’m 62 and my full retirement age is 66 years and two months.

Victor asks if he will still pay Social Security taxes if he works after reaching full retirement age. The answer is yes, he will. And the same would be true for you. Like any employee, you’ll have Social Security taken out of your paycheck every time you get one, no matter what age you are.

Next, “Will Social Security tax result in a recalculation of my Social Security, or maybe increase in my Social Security future benefit?” The answer to that question is also yes.

Keep in mind how Social Security is figured. To compute your benefit, they use your 35 highest-earning years. If one of those 35 highest-earning years happens to occur when you’re working during retirement, your benefit could be increased. In other words, if you earn money after your full retirement age, and you make more than you did in one of those 35 years, they’re going to drop your lowest-earning year and replace it with the current one.

How much will you have to earn to best a lower-earning year and replace it with a higher-earning one? The answer is easy to find. Go to SSA.gov. If you haven’t already, create an account. Then, you’ll be able to see what you’re likely to receive in Social Security benefits when your full retirement age rolls around.

You can also see your work history in terms of how much income you reported every year for your entire working life.

I recently looked at my history, all 47 years of it. I looked at my 35 highest-earning years. The lowest of the 35 was 1998, when I was struggling to make Money Talks News profitable and reported income of just $7,394. Since I’m now earning more, this year my 1998 earnings will fall off my record and my 2018 earnings will be added, thus slightly increasing my future lifetime retirement benefit.

It’s an interesting exercise to take a trip down memory lane and see how much you’ve made over the years. I encourage you to do it.

Hopefully that answers your question, Victor.

Now, let’s close as we always do, with our quote of the day. This comes from Robert Heinlein, a novelist and science-fiction writer.

“Money is the bugaboo of small minds.”

Meet me here next time and have a super-profitable day!

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would to any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
9 Ways to Get Cheap or Free Veterinary Care
9 Ways to Get Cheap or Free Veterinary Care

Medical care for your furry friends can be expensive. Here are some tips to take a bite out of vet bills.

It’s Worth Paying More for These 7 Things
It’s Worth Paying More for These 7 Things

Sometimes, the difference in quality makes it worthwhile to open your wallet a little wider.

5 Simple Steps to an Awesome Retirement
5 Simple Steps to an Awesome Retirement

The path to your dream retirement begins with these five steps. How many have you already taken?

The 10 Best Outdoor Home Upgrades for Your Money
The 10 Best Outdoor Home Upgrades for Your Money

There’s still time this summer to make improvements to the exterior of your home. These offer the best payback.

This Is the Best Age to Buy Long-Term Care Insurance
This Is the Best Age to Buy Long-Term Care Insurance

If you wait too long to apply for coverage, you could be denied. So, when’s the sweet spot to apply?

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.