I have two clients reaching their FRA (full retirement age) according to Social Security in December of this year. They have asked me when to file. Both plan on working beyond their FRA. My suggestion is that they wait until January due to the income penalties. Here is the earnings statement from the Social Security Administration:
•We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2016 that limit is $15,720.
•In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2016, the limit on your earnings for the months before full retirement age is $41,880.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Please remember: if you defer your Social Security payments until age 70, you can get an extra 8%/yr. added to your FRA benefit.

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