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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Jamie M.
When do you take the money out of my benefits payment when I make over the limit?
A.C.
Hi, Jamie. Thanks for your question. If you are younger than full retirement age during all of 2020, we must deduct $1 from your benefits for each $2 you earn above $18,240. Check out how work affects Social Security payments here. For specific questions about your benefits, please call us at 1-800-772-1213, Monday through Friday, between 7:00 a.m. and 7:00 p.m., for assistance. Generally, you will have a shorter wait if you call later in the day. You can also contact your local Social Security office. We hope this helps.
Nathaniel F.
I am retiring in May 2020. I will exceed the yearly limit before retiring. Does the Special Monthly Rule automatically apply? Or, is there a different process that I must apply thru?
Ronnie R.
Do you have Silver sneakers.One of you programs. And how do you qualify for it. Thank you very much
Dana H.
I am starting to get my Retirement this year. I know that I can early $1520.00 per month before getting penalized. My question is this a net or gross amount?
KEVIN T.
Why did SSA wait four months before I turned 66 to tell me I would be getting $700 less if I tokk SS at 66? I had been planning on $1800 something for four years. Very unfair of SSA to do. People I know that were born two years after me on ly had half as much cut and they had three choices 62, 66, or 70. Once again I”ve been had by my own government. I was the first class of Affirmative action and being white got turned down for all college loans. I really need my $1800 a month. Unlike a one time House of Rep. getting $174,0000 every year the rest of his life. Ugh
Sharon R.
I will turn 66 in March of this year, I will continue to work fulltime and want to collect my social security along with my normal income. Is there a limit on my income at 66? Also how soon before my FRA in March should I apply for my social security ? How do I have taxes taken out of my social security benefit?
L.A.
Hi Sharon. If you are turning 66 this year (2020), we withhold $1 from your benefits for every $3 of earnings above $48,600, but we only count earnings before the month you reach your full retirement age. For more information, please see our publication titled “How Work Affects Your Benefits.” You may apply for benefits up to four (4) months before your birthday. For information on taxes, please visit our Benefits Planner | Income Taxes And Your Social Security Benefit. We hope this helps.
MARY S.
THERE IS NOTHING HERE TO ANSWER MY QUESTION. I HAVE BEEN APPROVED AND WAS TOLD BENEFITS START JAN. 1, 2020 BUT IT IS JAN. 7, 2020 AND I HAVE NOT RECEIVED A CHECK. I CAN NOT CALL AN OFFICE AND THERE ARE NO “FAQs” THAT ADDRESS THIS. THE ONLY WAY TO RESOLVE THIS IS TO MAKE AN APPOINTMENT AT MY LOCAL OFFICE.
L.A.
Hi Mary. 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.
MARY S.
THERE IS NOTHING HERE TO ANSWER MY QUESTION. I HAVE BEEN APPROVED AND WAS TOLD BENEFITS START JAN. 1, 2020 BUT IT IS JAN. 7, 2020 AND I HAVE NOT RECEIVED A CHECK. I CAN NOT CALL AN OFFICE AND THERE ARE NO “FAQs” THAT ADDRESS THIS. THE ONLY WAY TO RESOLVE THIS IS TO MAKE AN APPOINTMENT AT MY LOCAL OFFICE-WHICH SUCKS.
Beverly S.
If you have been collecting SSD after you reach FRA is your benefits recalculated to what you would have received is you had started drawing at FRA? I understand this isn’t done automatically if at all.
Thank you
L.A.
Hi Beverly. Thank you for your question. Please note that we automatically recalculate the benefits of those beneficiaries whose earnings record shows a posting of new salary for the year. If new earnings are not found, the benefits are not recalculated for earnings. On the other hand, if a cost of living adjustment (COLA) increase is announced, all beneficiaries benefits are recalculated. We hope this helps.
Janie
I am thiking of applying for my Social Security benefits at age 62 and work part time for 2020.
I turn 62 In June , I know need to apply 3 months prior if want to get social security benefits , but are they going to take the part time earnings that I will be working for 2020 to base what I recieve in benefits or will they be calculating it on the full time earnings for 2019. Because its confusing what I read on line. I don’t see why it would pertain to full time earnings for previous year .
please r.
I am thiking of applying for my Social Security benefits at age 62 and work part time for 2020.
I turn 62 In June , I know need to apply 3 months prior if want to get social security benefits , but are they going to take the part time earnings that I will be working for 2020 to base what I recieve in benefits or will they be calculating it on the full time earnings for 2019. Because its confusing what I read on line. I don’t see why it would pertain to full time earnings for previous year .
I will be 62 on June 24, 2020 and will be applying for my social security benefits in March 3 months before June month . So I will be working full time from Jan – May 2020 and then part time starting for June Month when benefits are supposed to start. Do I get penalized for the months I worked full time and earned about 8900.00 for those first 5 months and starting working part time in June 2020 earning 1376.00 monthly starting June 2020 going forward.
A.C.
Hi. Thanks for your question. If you retire mid-year, we count your earnings for the entire year. We have a special earnings test rule that we apply to annual earnings—usually the first year of retirement. For more information on the Special Earnings Limit Rule and an example how it works, visit here. When you apply for retirement, let us know if you plan to continue working. Check out how work affects Social Security payments here. We hope this helps.