Financial advisor Kimberly Foss has a client in Arizona who went from a lifetime career in technology to making artistic jewelry after she turned 62, the early retirement age for Social Security.

The client does not make a lot of money with her new craft, but that’s OK, Foss says, because the woman does not want to get hit by Social Security penalties.

A lot of people in or near retirement do not realize Social Security penalizes people, depending on their age, for continuing to work while they collect Social Security. Financial advisors need to know how their clients will be affected by the Social Security penalties and help them calculate their best option.

“It is up to us as financial advisors to know the issues involved with Social Security and make sure our clients do not get surprised when Social Security withholds benefits because they are working,” she says.

Foss is a financial advisor who founded her own firm, Empyrion Wealth Management Inc. in Roseville, Calif., 24 years ago. She specializes in advising women in transition, including divorcees and widows, and retirees and near retirees.

“People get barraged with information today and they get overwhelmed,” says Foss. “Advisors have a fiduciary responsibility to make sure their clients do not make the mistake of working while they collect Social Security and then getting ‘dinged’ for their Social Security benefits because of the extra money they make.”

If a person retires before full retirement age, which is 66 for most people, but keeps working, Social Security withholds some benefits. For a person 62 through 65, Social Security withholds $1 for every $2 earned above $15,120 a year. The income limits are increased periodically.

During the year the person reaches full retirement age, the person is allowed to make up to $40,080 between Jan. 1 and her birthday. During that time Social Security withholds $1 for every $3 earned. At full retirement age a person is allowed to make any amount without penalty.

IRA and 401(k) withdrawals and investment income do not count towards the income limit; it is only earned income that counts.

Even if benefits are being received, withholding for Social Security and Medicare continues for any earned income and the employer continues to pay his share on behalf of the employee. A self-employed person continues to pay both the employee’s and the employer’s amount for Social Security and Medicare, which is 15 percent of the earned income.