En español | Q. I'm 66, still working full time and drawing Social Security. My employer is deducting Social Security and Medicare payroll taxes from my paycheck. I have two questions: Do I really still have to pay those taxes? Can I get any advantage with Social Security from working past 66?
A. On your first question: Yes. As long as you're working in a job that's covered by Social Security, as are most jobs, you'll have to keep paying Social Security and Medicare taxes indefinitely, regardless of your age or benefit status. In 2013, you must pay Social Security taxes on earnings up to $113,700. As for Medicare taxes, there's no limit. You'll pay them on whatever you earn.
The total tax rate for 2013 is 7.65 percent on you as an employee, with your employer kicking in an equal sum. Of those amounts, 6.2 percent is used to pay for Social Security retirement, disability and survivors' benefits. And 1.45 percent goes to the Medicare program. People who are self-employed pay both the employee's and employer's share, a total of 15.3 percent. However, they're allowed to deduct half of that amount on their income tax returns.
You should also be aware that you may have to pay federal income taxes on money you get from Social Security if you file as an individual and your income is more than $25,000. (You should know that for these calculations, Social Security considers your income to be adjusted gross income plus any nontaxable interest plus half your Social Security benefits.) If you file a joint return with your spouse, you'll face taxes if your income is more than $32,000. Depending on how much you make, up to 85 percent of your benefits may be subject to taxes.
One piece of good news for you: At 66, you're past the age when Social Security reduces benefits if your income is above certain levels. This limit applies only to people between 62, the earliest age at which you can get retirement benefits, and their full retirement age.
Stan Hinden, a former columnist for the Washington Post wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question? Check out the AARP Social Security Question and Answer Tool.
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