Can you collect social security and still work in 2027?

Welcome back. In today's Dollars and Cents, can you start taking Social Security payments and still work? That is a popular question and consideration, especially as people work longer. But in January, there are some new tax rules, things to keep in mind. So good thing we have local financial advisor Jason Matthews here to talk about that. So a lot of people do. I hear this conversation a lot as people get closer to retirement or they want to keep working for various reasons. They need to keep working. What do they need to consider if they want to start taking Social Security and still work? Yeah, so what they need to consider is, one, what is going to be their income if they take Social Security before their full retirement age. If they're going to make over $25,760 between 62 and their full retirement age, they're going to be penalized or money's going to be withheld from the Social Security that they thought they were going to get. And so that's one thing you definitely have to consider. Okay, so at what age... Do you avoid the penalties? Once you hit full retirement age. So what happened is from 62 to up until 67, if you make over $25,760, every $2 you make, $1 you're going to be penalized from Social Security. And then at 67, your full retirement age, it jumps up to a little bit over $67,000 of the year of your birthday. After that, you don't have to worry about that ever again for being penalized. I mean, who's living on $25,000 a year? I don't know. It's tough to do that. Right. So that's something that's hard to even think about. Uh, also added to your taxes, right? So that's the other thing too, is regardless of if you decide like, Oh, I think I might take out some money from my retirement account to say, you know, put on a new roof before El Nino hits, you have to add that onto your income, right? Correct. So that's where the things, and then this is where the planning really comes in. Like if I take the social security, I take money from my retirement plan to pay for our roof. What's going to be the tax implications from that? Cause that can push me in a higher tax bracket. I can pay more taxes on my Social Security, not just the penalty. So there's a lot of things. that go into it when you're putting together your plan on should you really be taking that Social Security early or not? Right. And as a financial advisor, I would imagine that you consider, as opposed to running up a credit card with a high interest rate right now, right? Correct. Some options that that might be a better option than. If you have to use a credit card. Correct. And so you want to compare that. You want to look at should, if you're still working, should you do a 401k plan loan? Should you do like, if you have a brokerage account, take a loan from there or a personal loan, what's your options for that? And then you also say, or do I take my Social Security? And so you look at the whole equation of it. What's going to be your after tax return, comparing the interest you're going to pay to service that debt compared to the taxation and see which one's going to benefit you better. And before we let you go with the midterm elections, data centers being voted down, Basically. AI, are you still looking to have portfolio diversity in AI? Yeah, you have to be very careful for that because oftentimes when we look at these target date funds, you look at your S&P 500, they have so much AI into them, already baked into them. That's a large part of your portfolio. So when you want to start really diving deep into your portfolio, you might already have those as well, and you might want to diversify out of your target date funds or even your S&P 500 just because you might see some concentration into that, Especially when you see the data centers are It's got to strike down so many different places. Delayed, at least. All right. Jason Matthews, thank you so much for joining us. Thank you for having me.