How the Rules Work for You
Reading Time: 2 MinutesLast Updated: July 12, 2018
Retirement doesn’t have the same meaning for everyone. Some people plan to retire and never work again. Some people plan for second careers in occupations that wouldn’t have adequately supported their families, but they do the work for pure enjoyment. Some people, whether by design or desire, choose to work part-time or seasonally to supplement their retirement income.
Retirees (or survivors) who choose to receive Social Security benefits before they reach full retirement age (FRA) and continue to work have an earnings limit. In 2017, the annual earnings limit was $16,920 for those under FRA the entire calendar year. In 2018, it is $17,040. If you earn over the limit, we deduct $1 from your Social Security monthly benefit payment for every $2 you earn above the annual limit.
In the calendar year you reach FRA, which you can check out on our website, you have a higher earnings limit. Additionally, we will only count earnings for the months prior to FRA. In 2017, the limit was $44,880. In 2018, it is $45,360. In the year of FRA attainment, Social Security deducts $1 in benefits for every $3 you earn above the limit.
There is a special rule that usually only applies in your first year of receiving retirement benefits. If you earn more than the annual earnings limit, you may still receive a full Social Security payment for each month you earn less than a monthly limit. In 2018, the monthly limit is $1,420 for those who are below FRA the entire calendar year. The 2018 monthly limit increases to $3,780 in the year of FRA attainment.
Once you reach FRA, you no longer have an earnings limit, and we may recalculate your benefit to credit you for any months we withheld your benefits due to excess earnings. This is because your monthly benefit amount is calculated based on a reduction for each month you receive it before your FRA. So, if you originally filed for benefits 12 months before your FRA, but earned over the limit and had two months of Social Security benefits withheld, we will adjust your ongoing monthly benefit amount to reflect that you received 10 months of benefits before your FRA, and not 12.
Most people understand that if they work while receiving benefits before FRA, their benefit may be reduced. What most people do not consider in their retirement planning is that we recalculate your Social Security monthly benefit at FRA to credit you for Social Security benefit payments withheld due to earnings over the limit. Explaining the earnings limit is another way that Social Security helps secure your today and tomorrow. Understanding both the earnings limit and the possible recalculation of your ongoing Social Security benefits will provide an additional perspective on retirement for you to consider.
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Tags: full retirement age, retirement, retirement benefits, survivors benefits
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Jim Borland, Acting Deputy Commissioner for Communications
Jim Borland, Acting Deputy Commissioner for Communications
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Fred L.
How do I get a replacement card for silver sneekers?
Ann C.
Hi, Fred. Please note that Social Security is not involved in the Silver Sneakers program. It would be best for you to contact your health insurance company to find out about this program. Thanks!
Lloyd J.
I received ssi at 62 for $1580 per month. During that time I went over the income limit and had to pay back all payments recieved.for that year . I was told my account was suspended. I was unaware that I can do over applying for ssi within a 1 year period to preserve my fra payments. I am 65 now and will reapply at 66 on may, 2019. Will I recieved any credit for the 3 years I did not recieve ssi payments while suspended which would then increase my monthly payments above $1580 per month ?
Ann C.
Hi, Lloyd. If your Social Security retirement benefits were reduced or withheld due to your excess earnings, we will recalculate your benefit amount when your reach full retirement age to leave out the months when we reduced or withheld benefits. We hope this helps.
Diane d.
I need a copy of my award letter ASAP.
Ann C.
Hi, Diane. If you need a benefit verification letter, you can view, print, and save your benefit verification letter by setting up a personal my Social Security account online. We hope this helps.
Martha
How do I apply to the Silver Sneakers program?
Stephany M.
Good evening,
My father’s receives social security for his retirement. He is 67 years old will be 68 in September. Can he work as much as he wants? Or does he have to pay a percentage?
Luis A.
Hi Stephany. From the information you are giving us, your father has already reached his full retirement age. If he has reached his full retirement age, there are no earnings limits that apply to him anymore. For more information, please see our publication titled “How Work Affects Your Benefits.” We hope this helps.
Patti J.
I was on SSDI for 10 years before I reached FRA, then it became Retirement Benefits. I had a few part time jobs while on SSDI and have had earnings since I attained FRA. Some of my yearly earnings exceeded the amounts earned in my 35 years they used to establish earnings. Why have My benefits not been recalculated. I called and they said it’s done automatically, or is it. How do I know I wasn’t overlooked?
Luis A.
Hi Patti. For your security, we do not have access to your personal information in this forum. For specific questions about your account, please call our toll free number, 1-800-772-1213 (TTY 1-800-325-0778), from Monday through Friday, between 7:00 a.m. and 7:00 p.m. You may also contact your local Social Security office. We hope this helps.
Gail S.
I want to know which states participate in the WEP. I think it is unconstitutional for a group of states to dictate the disbursement of funds from a federal agency. Instead of being a teacher I should have become an accountant or sanitation worker!
Luis A.
Hi Gail. Thank you for your question. Please note that the Windfall Elimination Provision (WEP) is applied in all States of the United States to a person that has worked on a job where she or he does not pay Social Security taxes. Some examples of those jobs are; federal employees, State employees, teachers, and others. We hope this helps.
James H.
Hi,
I’ll reach FRA in Nov 2019, my spouse will reach FRA Dec 2022. My spouse will continue to work until Jul 2021 and will earn $80,000 per year until then.
If my wife applies for her SS benefits in Nov 2019 and I apply for restricted spousal benefits at this time will her benefits that are deducted based on $1 for each $2 earned be added to her benefits once she stops working?
Miriam H.
If I sign up for Silver Sneakers, thru my Social Security, does that dollar amount get deducted from my monthly amount that i receive?
Luis A.
Hi Miriam. Social Security is not involved in the Silver Sneakers program. It would be best for you to contact your health insurance company to find out about this program. We hope this helps.
Vipul D.
if I want to reduce social security payment than what should I do? I am cancelling my medicare. I am hoping for an alimony and cannot take social security at all. But USA law sting for alimony. I trusted her and turn the face for me. Her salary is good and it is costing half of it. Give her counselling.