How the Rules Work for You

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.


232 thoughts on “How the Rules Work for You

  1. But do I still have to pay taxes on my SSI regardless of my income after age 66 or FRA? H & B told me that my SSI was taxed after 66 regardless of my income. Someone once told me that after you turn 66, you could make as much money as you can and you won’t pay income tax on your SSI. What is your answer?

    • Hi, John. Thanks for your question. Under current law, the Internal Revenue Service (IRS) considers Social Security benefits taxable income for beneficiaries whose countable income exceeds certain limits. To learn more about those income thresholds, visit here. For any income tax questions, you will need to contact the IRS. Their toll-free number is 1-800-829-1040 or you can visit their website at We hope this helps.

  2. 4 phone calls and this is the second email with no reply. I worked for local government. (Now I work for another local government, but SS is paid.) In my old job we did not pay SS. I have withdrawn funds from this retirement. I have requested/received and returned a form more than on time that, I think, has something to do with windfall profit each time I withdraw. This time 2 of the people I spoke to said I was wrong, no form, no nothing. 2 people said I was right and they would send the form. But they did not. I just don’t want this to come back and bite me. PLEASE let me know what I do or do not need to do. I am 72 years old and getting SS.

    • Hi, Sharon. We are sorry to hear about your frustration. For your security, we do not have access to private information in this venue. We ask that members in our Blog community work with our offices with specific questions. You can 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. You can ask to speak to a supervisor on your next visit or call. We hope this helps.

  3. I am 64, retired from government (FERS). Not yet at FRA.
    Can I withdraw $80k from my TSP account to pay off my mortgage without penalty to my Social Security monthly benefit? Does a TSP withdrawal count as earned income?

  4. I retired at FRA 2015 and my wife retired in September 2014 (both born in 1949). My wife’s benefit was reduced because of the Government Offset Provision.

    When will her spousal benefit (50% of mine) come into effect? There is a considerable difference.

  5. I am 76 years old, I can work and make as much money as I want to, now the questions is, why is it that where I live at, do they have the right to add what I make at work, and my social security plus retired check, together? I am trying to tell them that they are not to do that, am I right on that? I need to know about that. I was told that what I get from social security and retirement not suppose to be added into my rent?

  6. I started receiving social security at age 62, I want to know can I swapping benefits on my ex-spousal decease husband benefit and how do I apply?

    • Hi, Wanda. Thanks for your question. If the marriage lasted for at least 10 years, you could be eligible for surviving divorced spouse benefits based on your ex-husband’s earnings. For additional information on Survivor benefits, check out our Survivors Planner here. To find out whether you qualify and if you need to file an application, you can call our toll free number, 1-800-772-1213 (TTY 1-800-325-0778) and ask to speak with one of our representatives. Please be aware that our call wait times are longer than normal. We hope this helps.

  7. I have just been diagnosed with ALS and am considering applying for SSDI benefits. I am self employed. Before I apply, I would like answers to two questions. Firstly, how are monthly SSDI payments figured/calculated? Secondly, I am 73 years of age and have received regular SSA (“old age”, for the lack of the proper term), benefit payments since I turned 67+. Will that payment have anything to do with my SSDI payment, and vice-versa?

    • Hi Pat, thank you for using the blog to ask your question. Social Security Disability Insurance (SSDI) payments are only made to people who become disabled prior to reaching their full retirement age. Because you are past your full retirement age, you are already receiving the highest amount that you are due from Social Security. Hope this helps!

  8. I was born the last week of in November 1954. I want to start collecting my social security benefit at my full social security age of 66. What month would my Benefits Start and what month will I receive my first payment?

  9. Both my husband and I have worked our entire lives. First question – do we both receive benefits or is there a max amount we can bring into our household? Second question – is your proposed amount based on your entire work history or just the year before you retire?

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