Here is a question that was asked recently by Vita about Social Security benefits:

Q: For those 65 and older and eligible for social security, are they still able to earn something (and if so, what is the annual limit)? How does having an IRA or an employer pension plan affect their eligibility for social security? Thank you!

A: Let's start but recognizing how absurd it is that the government punishes people for working. That's right. If you work "too much" you don't get all (or in some cases, any) of your social security payments. Still, the rules are not nearly as bad as they used to be. In fact, if you wait until your "full retirement age" then you can earn all you want and not lose any of your benefits. For those who were born between 1943 and 1955, full retirement age is 66.

If you take social security payments before you reach full retirement age, then your benefits are reduce by $1 for every $3 you earn in excess of $37,860 until you reach full retirement age. If you lose benefits because of your earnings, then your benefits will increase when you reach full retirement age to start paying you back for your lost benefits.

Only earned income counts. So, investment income, passive income and retirement income from pensions and annuities don't count and you can earn all you want of these types of income. So having an IRA or pension plan doesn't have any effect on your Social Security benefits.

For more about these and other social security questions, go to http://www.ssa.gov.

Warmest regards,

Tom