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ASK KIM
No Social Security Benefits Squeeze
by Kimberly Lankford

I'm a military retiree and am thinking of taking social security at age 62. Will my military pension count against the $11,500 I can earn before losing social security benefits?

No. The social security earnings test counts only wages and self-employment income. Investment earnings, pension payments and IRA withdrawals don't count.

For people who claim social security before reaching full retirement age (65 and 4 months this year), benefits are reduced by $1 for every $2 of earnings in excess of the limit, which goes up each year. For 2004, the tipping point is $11,640. Someone who earned $20,000 from a job or self-employment, for example, would lose $4,180 in benefits -- half of the $8,360 that exceeds the 2004 earnings-limit test.

For help calculating your social security benefits, see the Social Security Administration's Web site.