Everyone, including Lockheed Martin retirees and current employees, must make applicable Social Security contributions on income, even if you are working past your full retirement age. Working past your full retirement age may also increase your Social Security benefits because Social Security contributions continue to be paid. You must be care though, because continuing to work may lower any current payments taken during the year in which your full retirement age is reached, according to a Social Security Administration limit.

Let’s say that you reach your full retirement age in July. Your total benefit income earned from January to July must be below the stated Social Security limit of $51,960 for 2022, or your benefits will be lowered by $1 for every $3 of income over the limit.

  Allianz Life Insurance Company of North America 2022 Tax Summary Sheet

The additional dollars paid are held by the Social Security Administration and repaid over time once the taxpayer retires. It is important to note that there are no limits on income earned past the month in which full retirement age.

Beware, taking Social Security benefits while still working may have the unexpected negative consequence of bumping a you into a higher tax bracket. Most people forget that their Social Security benefits may be taxed—up to 85%—depending on their filing status and combined income, including half of their Social Security benefits.

In addition, some states also tax Social Security benefits. There are currently 13 states in that also tax your Social Security benefit: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. To learn more, you will need to check with the state tax agency.

If you are continuing to work, you are not required to pay any Social Security tax past the wage base limit, which is $147,000 for 2022. So, if you earn $147,000 or more, the most you will pay in Social Security tax is $9,165. If you make less than $147,000, then your Social Security tax will be less.

Whether or not to continue to work or when to start receiving your Social Security benefits are certainly questions that can be discussed with your financial advisor. If you don’t have one, we do! We have Lockheed Martin specialists who are well educated in your benefits and in the art of financial planning.  Click here or call 817-210-3444 to schedule a complimentary consultation today. 

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!

Disclosures*

Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

This blog is being provided and sponsored by Strittmatter Wealth Management Group, LLC. Lockheed Martin and its subsidiaries do not endorse, recommend, or make representations with respect to any information, advice, services, or products discussed in this blog. 

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.

SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.

Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.