How much income can I make while receiving social security?

A fellow caregiver asked...

I am curious as to how the Social Security system views working while collecting Social Security. Approximately how much can one receive working while collecting Social Security? According to the paperwork I receive, I currently am eligible for $700 a month which will not cover all my expenses so I am concerned. I am 55 and,if I am able,I would like to work until at least 65.

Please advise.(that is if Social Security will still exist!)

Expert Answer

Once you reach what Social Security calls "full retirement age," you can work and earn as much money as you want without any reduction in your Social Security retirement benefits. For someone your age now, full retirement age will be 66 (not 65, as it was for most of Social Security's history).
However, you don't have to wait until full retirement age to collect Social Security retirement benefits. You could collect your Social Security retirement benefits as early as age 62. But if you collect those benefits at any time before you reach full retirement age, two different rules would affect how much your benefits are.

 First, your retirement benefit amount would be permanently reduced by a bit more than 0.5 percent for each month you claim it before you reach age 66. If you live a long life, this could mean the loss of tens of thousands of dollars in benefits over your lifetime.

Second, if you continue working after you claim Social Security benefits at less than full retirement age, those benefits would be reduced if you earn over a certain amount. Until you reach full retirement age, Social Security would reduce your benefits by $1 for every $2 you earned over a set yearly limit. (In 2009, the limit is $14,160.) This limit applies only to income you earn from current work, not from any pensions, investments, or other sources of income not derived from work you are doing at the time.