Working at 76 After Early Social Security? You Still Owe Payroll Tax
Claiming Social Security at 62 doesn't exempt you from payroll taxes if you keep working. Here's what older workers need to know.
You claimed Social Security at 62, took the reduced benefit, and figured you were done with the tax man on earned income. Wrong. If you're still punching a clock — say, at your local Walmart at age 76 — payroll taxes are still coming out of every paycheck, no matter how old you are or how long you've been collecting benefits.
Payroll taxes, meaning Social Security and Medicare withholding, have no age exemption. The IRS doesn't care that you already paid into the system for decades. As long as you're earning wages from an employer, you're subject to FICA taxes. That's the rule for W-2 employees at any age.
Read more Reverse Mortgage vs. Home-Equity Agreement at 70: Which Wins? →
The situation isn't rare. As MarketWatch notes, it feels like half the workforce at many Walmart locations is over 65. Older Americans are staying in the workforce longer — sometimes by choice, sometimes out of necessity. Early claimers who locked in a reduced benefit at 62 often find that benefit alone doesn't cover the bills, pushing them back into employment.
Here's the tradeable angle on your personal finances: if you're in this boat, understand that your continued work earnings don't directly increase your Social Security check once you're past full retirement age and already claimed. You're paying in without a proportional payback. That makes every dollar of gross wages worth less in net terms than it looks on the pay stub. Factor that into any decision about whether part-time work actually pencils out after taxes.
Bottom line — age is not a tax shelter. Plan accordingly. Continue reading at MarketWatch.com
