Social Security retirement benefits may begin at age 62 (at the earliest) and some pre-retirees believe they will face a dilemma over whether to keep working or start their benefits at 62.  If your clients are concerned over this choice, tell them to relax.

Any benefits Social Security withholds (because of work income) from ages 62 through 66 will be credited back at the full retirement age of 66. The "earnings limit" for 2011, for people age 62-65, is $14,160. For every dollar earned through work above this limit, Social Security withholds 50 cents. This continues until Jan. 1 of the year in which reach full retirement age (currently 66) is attained, when the limit increases to $37,680 and withholding reduces to 33.3 cents per dollar over the limit. After the 66^th birthday, there is no earnings limit.

Most people who think they will earn over the limit should simply delay the start of benefits until their 66^th birthdays. In addition to permanently increasing monthly benefits (compared to starting at 62), this also preserves the ability to earn Delayed Retirement Credits for deferring the start date past the 66^th birthday.