Thinking about going back to work after retirement? Here's how your Social Security checks may be affected

Are you retired and thinking about going back to work? Are you planning for retirement but thinking that you may decide to start working again at some point?

You're not alone. An increasing number of retirees, having left the workforce, filed for Social Security benefits, and planned visits to their grandchildren, are returning to work.

The trend of retiring and returning to work is pronounced enough to have been given a name: unretirement. Roughly 26% of retired Americans later go back to work. Not only that, but almost 40% of workers aged 65 or older were retired at one point.

They're part of a growing wave of people who have hit retirement age and are still working. Nearly 19% of Americans 65 and older were employed either full-time or part-time in 2016, compared to just under 13% in 2000.

So if you've claimed your Social Security benefits and then started to consider unretiring, you're in good company. But don't make the decision without thinking long and hard about the effect of unretirement on those Social Security benefits, because your monthly checks may be reduced, depending on your age and your income.

Making a retirement decision

So when should you first decide to retire and claim Social Security if you think unretirement might be part of your life in the future? To understand the options, it's helpful to know Social Security's benefit structure. The amounts you receive depend on when you decide to retire and how old you are. It's a good idea to factor multiple Social Security benefit scenarios into your "when do I want to retire" calculations.

Eligibility begins at 62. Your benefits are reduced, however, if you choose to retire before your full retirement age, which depends on your birth year. For people born between 1943 and 1954, it's 66. It rises to 67 for people born in 1960 and after.

Social Security payments also rise approximately 8% for every year you delay benefits between your full retirement age and age 70, no matter what your full retirement age is. They also rise between 62 and your full retirement age, but by a smaller percentage. 

Now, let's look at what happens to your Social Security benefits when you unretire.

Unretirement within 12 months of applying for Social Security

If you decide to unretire within 12 months of applying for Social Security benefits and you're under 70 years old, you can apply to withdraw your Social Security claim.

Just fill out a form and submit it to the Social Security Administration (SSA).

If you decide to go this route, the SSA requires you to repay all the benefits you and your dependents have received. You'll also need to repay any money withheld from the checks, such as Medicare premiums.

You can then reapply at a later time.

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