Understanding the Social Security Earnings Test for Early Retirees

You can work part-time and start drawing benefits before full retirement age, but expect smaller Social Security checks – even if you put your earnings toward a 401(k).

I am 62 years old and plan to start collecting Social Security benefits this year while working part-time. Can I reduce the amount of income subject to the Social Security earnings cap by contributing to a 401(k) plan?

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.