Archive for June, 2018

Details, Details

Add comment June 17th, 2018

Freelancing as a book designer is a wonderful thing. I imagine it’s the same for freelance editors, freelance illustrators, and … well, you get the idea. But that doesn’t mean we want to go full-tilt forever. In my case, working a secure, full-time day job for over 30 years to pay the bills, for the benefits, and for the pension, enabled me to work at developing my business, which, of course, is what freelancing is.

At some point, however, you want to ease up, slow down, work less, perhaps retire (or semi-retire), and still live a good life. If you’ve had a career all along, in addition to your freelancing, perhaps you were lucky enough to participate in a pension plan that will contribute to keeping you comfortable in your later years. But whether you have a pension or not, there’s Social Security.

Of course, Social Security is not a whole lot and needs to be part of a whole network of savings, investments, and, perhaps—if you still love the work—some continued freelancing. But if you began collecting Social Security before you reached what the Social Security Administration (SSA) calls “full” or “normal” retirement age there’s some fine print.

Now, before I go any further, let me make clear that I’m not an accountant, an attorney, or someone who ever worked for the Social Security Administration. You need to do your own homework and ask the right questions of people well-versed in the details of all this. I’m just sharing the little I’ve learned about these issues.

To start with, there’s that matter of when you reach “full” retirement age. From the SS website there’s this:


Age To Receive Full Social Security Benefits
(Called “full retirement age” or “normal retirement age.”)
Year of Birth * Full Retirement Age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 – 1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67
*If you were born on January 1st of any year you should refer to the previous year. (If you were born on the 1st of the month, we figure your benefit (and your full retirement age) as if your birthday was in the previous month.)


So if you continue to freelance, you haven’t reached that full retirement age and have elected to collect Social Security benefits, you need to make yourself aware of what the earnings limit is for each year until you do reach that “normal” retirement age. If you go over that amount, you will have to pay back to the SSA 41 for every $2 you exceed the limit through a reduction in your benefits.

Last year, 2017, the limit was $16,920 ($1,410 per month). This year the figure is $17,040.

The limit does rise in the year in which you reach your full retirement age. If you reach it in 2017, for instance, you’re allowed to earn up to $4,480 without penalty. And if you collect your Social Security benefits and reach full retirement age next year, 2019, your earnings limit rises to $45,360.

Interestingly, you don’t necessarily lose those penalized benefits permanently. That is, the SSA will apply those withheld (penalized) benefits as a delayed credit. And this will would permanently increase your Social Security benefit when you do reach full retirement age. The catch is, of course, the same as if you waited for your full retirement age to collect benefits from the jump: you need to live long enough to recover what you lost by either delaying collecting or because of penalties.

Oh, and then—as a Social Security agent I spoke with told me—once you’re in your first full year having reached that normal retirement age, there are no longer any earnings limits. “You can earn a million dollars without penalty, she said.”


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