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Will you lose retirement benefits if you keep working?

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Do you want to stay active in retirement? If you keep working, that’s great, but make sure it’s still worth your while.

Strategy: Figure out whether you’ll pass the Social Security “earnings test.” If you’re not careful, some of the Social Security benefits you’re entitled to receive in 2008 will be reduced.

The Social Security Administration adjusts the earnings test annually. It recently posted the new limits for 2008. (Social Security Online, updated10/17/07)

Here’s the whole story: The earnings limit for 2008 is $13,560 if you’re between the ages of 62 and normal retirement age (up from $12,960 in 2007). If you exceed the earnings limit, you will forfeit $1 of benefit for every $2 of excess earnings.

If you’re reaching the normal retirement age in 2008, the earnings limit is $36,120 for the months before your birthday (up from $34,440). Workers in this situation lose $1 for every $3 of excess earnings.

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