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Independent, Fee-Only Financial Advisor

Tuesday, February 08, 2022

February 8, 2022 Money Talks: Social Security

This episode of MPB's Money Talks originally aired February 8, 2021 and is available online at

This week, our radio guest was Shawn Mercer, a District Manager from the Social Security Administration. Shawn is an expert on all matters regarding Social Security and this show is always a favorite with callers.

As it is also tax time, we noted that the Social Security Administration sends out a special tax form, the SSA-1099 for everyone who receives benefits. Shawn always encourages people to sign up for an account at, where they can access all of their information and answer most questions.

We got a lot of excellent calls, and I've reformatted them here. Almost all of the answers were provided by Shawn Mercer.

Q: Several years ago I went on disability for 3 years. Started a work program to get back not workforce. Got a letter saying I would be removed from disability but continued to receive checks for almost a year before they stopped. About a month or so after, they sent a bill for $25,000. Now getting close to retirement. How will this affect him when I get to retirement age?

A: If there is an outstanding debt, SSA will try to collect. They are taking tax return as there is not a regular payment. You can start receiving benefits though. You can negotiate a payment when you plan to take retirement benefits. There is no interest on the debt.

Q: Could you talk a little bit more about getting off of disability? That is a somewhat common and frustrating situation.

A: For most people there are all kinds of work incentive programs with a 9 month trial period. The way it should work is that in the 9 month period, you report what you make, and that doesn’t affect your disability payments. After 9 months, benefits should terminate and any additional that you receive will be owed back. Lots of communication back and forth and lags are common in this process. 

Q: I'm looking at early retirement at 62. What is maximum I can make in income, net or gross? Do I pay SS taxes on that amount?

A:  Earnings limit goes up each year, $19,560 this year. That is gross wages, or net self-employment income. You will continue to pay SS (payroll) taxes on those wages. Your earnings could actually go to increase your benefit payments if they replace one of your highest 35 years of earnings. More information on this can be found here.

For more detail on what sounds towards this limit, see this helpful brochure from the Social Security Administration:
If you work for someone else, only your wages count toward Social Security’s earnings limits. If you’re self-employed, we count only your net earnings from self-employment. For the earnings limits, we don’t count income such as other government benefits, investment earnings, interest, pensions, annuities, and capital gains. We do count an employee’s contribution to a pension or retirement plan, however, if the contribution amount is included in the employee’s gross wages.
If you work for wages, income counts when it’s earned, not when it’s paid. If you have income that you earned in one year, but the payment was made in the following year, it shouldn’t be counted as earnings for the year you receive it. Some examples are accumulated sick or vacation pay and bonuses. 
If you’re self-employed, income counts when you receive it — not when you earn it — unless it’s paid in a year after you become entitled to Social Security and earned before you became entitled.
Q: My husband died in 2016 and I took widows benefits. I am at full retirement age (FRA) now, but waiting until 70 to take her own. Another widow was told they don’t do that anymore.

A: If your benefit on your record is higher, they will allow you to change over to the higher benefit. For some individuals they would never have a higher benefit. Case by case basis - you will still get the higher one you are entitled to. The earliest you can take widow/widower benefits is age 60, and that benefit increases each year as you wait. If you are over age 62, look at your own record first, then look at any other benefits that might be available.

Q: I'm really concerned about what representative for SSA will talk me into or not tell me? I will be retiring at 70.

A: At SSA we are not telling you anything other than what the benefits will be. We are often asked “what is the best time to retire?” but we cannot really answer that. They cannot tell you the best age, but can tell you what your benefits will be at different ages. If you are retiring at 70, no need in waiting past then, it will not increase after age 70. Nancy emphasized that the decision to retire and the decision to take SS benefits are not the same thing. It doesn’t have to be! If you can afford to wait until 70 you will maximize that lifetime income! Making that decision is the job of you and a financial planner - not the Social Security Administration.

Q: I found answers to all of my questions online! What would be a reason to go into office? If you can get answers and file claims on website, what is reason to go inside?

A: There are more complex issues that may need to be handled in person. Currently office are closed, but dire need and critical needs can come in. People with no SS number. Sometimes there is an anomaly with a claim filed online that something is needed, extra ID verification. Also doing phone appointments, as not everyone has internet!

Q: I have been drawing disability for 5 years and am now 60. If I goes back to work, how many hours, how much can I make? When she turns 62, does it change to retirement benefits automatically, or does she need to file?

A: If you go to work, contact your local office to see how much you are making. To be eligible for disability benefits, a person must earn less than the Substantial Gainful Activity threshold, which is about $1,350/mo. You will need to report your earnings monthly to your local social security office. Just as outlined to the previous caller, there is a nine month trial period where you can earn over $1,350 and still receive benefits.

Disability benefits do convert to retirement but that happens at full retirement age - automatic if you are still taking benefits. Disability is unreduced benefit at FRA based on what she had earned so far. If she stopped and got off disability, she would be able to delay until 70. Until then, earnings are subject to the substantial gainful activity amount. 

Our last question was not about Social Security:

Q: Husband and I are both retired. We both have IRAs. Can a nursing home take all or part of our IRAs for medical bills?

A: Nancy explained that the nursing home does not take your money, but you may be required to spend down assets. This may have been a reference to Medicaid - which has income and asset limits for those receiving benefits. Some assets may be subject to recovery by Medicaid. Rules here may vary by state, but if you are taking RMDs from your IRA, it may be considered to be in "payout" mode, and the balance would not be considered an asset, while the withdrawals would be considered income. You may want to talk to an elder law attorney.

The last sneaky hint that Shawn dropped was that you shouldn't carry your card around! You may need it sometimes for financial accounts or ID, but most people will not need to carry it around with them. It is unfortunate that they are in a wallet sized format. Do not laminate them either!

Don't forget to tune in or subscribe to Money Talks at 9 AM every Tuesday on Mississippi Public Broadcasting, or online at This episode is available online.