What happens to Social Security taxes paid after starting retirement benefits? Husband worked part-time
My husband (67) started collecting his Social Security retirement benefits in 2023. This year, he picked up a part-time job at our local hardware store (20 hours weekly) and I noticed they're still taking Social Security taxes out of his paychecks. Since he's already receiving benefits, what happens to this money being deducted? Does it just disappear into the system or will his monthly benefit amount increase? The store pays him about $850/month and he's paying around $53 in SS taxes each month. Seems unfair to pay if you don't get anything back. Anyone dealt with this before?
15 comments
Join the conversation
Ryder Everingham
This is actually a common question! The money doesn't disappear. Social Security recalculates benefits each year. If your husband's current earnings are higher than one of the 35 years used to calculate his original benefit, his benefit amount will increase accordingly. The adjustment happens automatically - SSA reviews earnings records every year. The increase might be small, but it's not money lost. Also, since he's past his Full Retirement Age, there's no earnings limit to worry about.
0 coins
Aisha Jackson
•Thank you so much! I had no idea they recalculate. Do you know when this typically happens? Will they notify him about any increase or just start paying the higher amount?
0 coins
Lilly Curtis
thye take it and run lol!! gov't money grab, nver getting it back sorry. my dad worked after retiring and NEVER saw a penny increase in 8 years
0 coins
Ryder Everingham
•That's not accurate. The SSA automatically recalculates benefits annually. If your father never saw an increase, it might be because his post-retirement earnings weren't higher than his previous 35 highest earning years used in his original calculation.
0 coins
Leo Simmons
I was wondering the EXACT same thing!!! My wife started her SS last year and just got a job at Walmart. They're taking out SS taxes and I was like WHY?? So frustrating trying to get someone at SSA to explain this. I've called FIVE times and got disconnected every single time while waiting. The website doesn't explain it clearly either. Let me know if you get a straight answer from anyone.
0 coins
Lindsey Fry
•If you're struggling to reach SSA, I'd recommend trying Claimyr (claimyr.com). It helped me get through to a real person at Social Security when I had a similar question about post-retirement earnings. They basically connect you with a Social Security rep without the usual wait time. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - saved me hours of frustration.
0 coins
Saleem Vaziri
The way this works is called an "Automatic Earnings Reappraisal Operation" (AERO). Social Security reviews everyone's records annually, typically around October, to see if recent earnings increase your benefit amount. If it does, the increase is retroactive to January of the year after you earned the money. Two important things to know: 1. The increase only happens if the new earnings replace a lower-earning year in your top 35 2. You don't need to contact SSA - it happens automatically Some people might not see increases if their current part-time work doesn't exceed their previous earnings from their career. But the system does work as designed.
0 coins
Aisha Jackson
•Thanks for explaining! October makes sense - I'll watch for any changes then. His hardware store job definitely pays less than his career earnings, so maybe we won't see much difference. Good to know the system at least tries to be fair.
0 coins
Kayla Morgan
my neighbor worked after retirement and his benefit went up $12 a month the next year. better than nothing i guess
0 coins
James Maki
I think your husband might also need to be aware of how this affects his taxes overall. Working while collecting Social Security can push you into a higher tax bracket AND make more of your SS benefits taxable. My husband and I had a nasty surprise when we filed taxes after he did some part-time work. We ended up owing money when we usually get a refund!!
0 coins
Aisha Jackson
•Oh no, I hadn't even thought about the tax implications! We'll definitely look into this. Thanks for the warning - I'd hate to have a surprise tax bill.
0 coins
Saleem Vaziri
•This is a good point about taxation, but I want to clarify something important - working won't push ALL your income into a higher bracket. Tax brackets are marginal, so only the income that falls into the higher bracket gets taxed at the higher rate. And yes, if your combined income (adjusted gross income + nontaxable interest + half of Social Security benefits) exceeds certain thresholds, more of your SS becomes taxable - up to 85% maximum.
0 coins
Lilly Curtis
my wife's friend said if you work after getting benefits they can make you pay some back if you earn too much??
0 coins
Ryder Everingham
•That only applies if you're collecting benefits BEFORE your Full Retirement Age (FRA). Once you reach your FRA (66-67 depending on birth year), there's no earnings limit - you can make as much as you want with no penalty or payback. Since the original poster mentioned her husband is 67, he's past his FRA, so no worries about earning too much.
0 coins
Aisha Jackson
Thanks everyone for the helpful answers! I feel much better knowing the money isn't just disappearing. I'll watch for any potential increase around October, though I won't expect much since his current job pays way less than his career. And definitely appreciate the warning about tax implications - we'll talk to our tax person to avoid surprises!
0 coins