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Can Truck Drivers Claim Social Security Benefits While Working?

Updated: May 31, 2023

As an owner-operator truck driver, you may be approaching retirement age and wondering if you can collect Social Security benefits (SSB) while continuing to work. The good news is that it is possible, but there are certain rules and limitations you need to be aware of.


What are the rules and limitations?

If you collect Social Security benefits before reaching full retirement age (FRA), your benefits may be reduced if you earn more than a certain amount. FRA can fall anywhere between 66 and 67 years old depending on the year you were born. You can look at the chart here to determine your FRA. However, you can start receiving your Social Security retirement benefits as early as age 62.

Social Security Benefits Form

If you choose to collect Social Security benefits prior to FRA it may be important to understand when those benefits can be reduced. For 2023, taxpayers receiving benefits that have not yet reached FRA are entitled to earn up to $21,240 per year before any reduction in Social Security Benefits. If you earn more than this amount, your SSB will be reduced by $1 for every $2 you earn above the limit.


For example, if you earn $40,000 in 2023, your SS Benefits will be reduced by $9,380 ($40,000 - $21,240 is $18,760 over the earnings limit. SSB will be reduced by $1 for every $2 over the limit meaning your benefits would be reduced by $9,380 ($18,760 / 2)).


Keep in mind that each person’s SSB may vary based on their lifetime work history. Using the 2023 average SSB benefits of about $1,700/month the annual SSB would be $20,400. Remember SSB reduction would only begin if your other earnings during the year exceed $21,240. In other words, you can receive full SSB and work to obtain additional earnings of up to $21,240 without any reduction in your SSB. Below is an example of two taxpayers:


Taxpayer A in the table above continued to work and earned a total amount of $62,040 from non-Social Security activities. Taxpayer A’s SSB was reduced to zero. Taxpayer B earned up to $40,000 and received a reduction of total SSB but still received $9,380.


However, once you reach your FRA, you can earn as much as you want without any reduction in your Social Security benefits. As an owner-operator truck driver, this means that you can continue to work and earn income while also collecting Social Security benefits.


It's important to note that SSB reductions are temporary meaning that your benefits may be reduced when you are earning more than the earnings limit. However, your SSB will be recalculated by the Social Security Administration, and your excess earnings in one year may result in larger benefits for future years when you reach your FRA.


What are the tax implications?

It's also worth considering the tax implications of collecting Social Security benefits while working as an owner-operator truck driver. Your overall income may affect your tax liability, and Social Security benefits may be subject to federal income taxes if your combined income (including Social Security benefits) exceeds a certain threshold. For 2023, the threshold is $25,000 for individuals and $32,000 for married couples filing jointly.


If you file a federal tax return as an individual and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits. If your combined income is more than $34,000, up to 85 percent of your benefits may be taxable.


If you file a joint return, and you and your spouse have a combined income that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits. If your combined income is more than $44,000, up to 85 percent of your benefits may be taxable.


Keep in mind the percentage of benefits considered taxable is not a tax rate. This is an important distinction.


Each January, you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax.


So can you collect Social Security benefits while continuing to work?

The bottom line - If you are an owner-operator truck driver approaching retirement age, it is possible to collect Social Security benefits while continuing to work. There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit may be reduced.


Each person's situation is different, so consider speaking with ATBS or contacting the Social Security Administration for more information to ensure that you are making informed decisions about your retirement income.

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