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Many people hit their retirement age set by the organization they work for OR the Social Security retirement age, but they still want to keep working. Knowing what is, and is not, allowed is important and will help both the individual and the church or nonprofit know how to handle this situation properly. Here is a brief summary:  

Retirement Age – an organizations retirement age is completely different than an individual’s social security retirement age. An organization may say retirement age is 65 for everyone, but the social security retirement age varies based on the year of birth of each person. 

Social Security – at one time 65 was also the same age for people to start taking social security.  There are exceptions and under certain circumstances people can start drawing social security as early as age 62 – for more info on those topics visit the Social Security web site to find out your age of retirement and the benefit percentages at different ages. 

Present day, the social security age is being pushed up and people who are retiring now are having to wait until 66 and older before they can start drawing their FULL social security benefits.  

So, what happens if a retired person starts drawing their social security and decides to come back to work in a church or non-profit? It is really quite simple:

• Persons younger than full retirement age may have their Social Security retirement benefits cut if they earn more than a specified amount. If you are not at full retirement age you will be penalized for making over a certain amount and that amount changes each year. For 2019, the amount is $17,640 and the penalty for every $2 you make over $17,640 the social security benefit will be reduced by $1.  
• In the year you reach full retirement age (the age at which you are entitled to full social security benefits) can earn a larger amount before benefits are reduced. That amount for 2019 is $46,920. Not only can one make more money after full retirement age is reached, but the reduction amount is also lowered to $1 for every $3 made above $46,920 per year. 
• Beginning the month you reach full retirement age your earnings no longer reduce your benefits no matter how much you earn.

It is critical to know this important information. I have consulted with individuals who tell me they cannot retire due to their financial situation and then I am able to show them that they can work less in retirement and make more money than when they were working full-time.  

It is important also for the church and nonprofit to know this information so they can guide current employees correctly, but also engage retired persons to serve in their organizations. If you, or someone you know, needs help through these discussions, please contact us today.