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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Clara B.
I reach my full retirement age this past month of august, and also received spouse survivor benefits since 2016, if a apply for retirement will they reduce my monthly benefits, I’m working in America since 2003.
V.V.
Hi Clara, thanks for using our blog. If you qualify for retirement benefits on your own record, you can switch to your own retirement benefit as early as age 62 or as late as age 70.
Check out our Survivors Planner web page for additional details.
Francis R.
I am 70 and continuing to work and pay the maximum. Each year has replaced a lower year of income. at what age will the earning not replace a lower income year in the calculation of 35 years
V.V.
Hi Francis, thanks for using our blog to ask your question. Generally, if you continue to work while receiving retirement benefits, your monthly benefit amount may increase. As long as you continue to work and receive benefits, we will check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount. We hope this helps!
Diane F.
I began taking SS benefit at age 62. When I reach FRA am I eligible to receive 50% of my spouse’s benefit? My spouse is 13 years older.
V.V.
Hi Diane, thanks for using our blog to ask your question. You do not have to wait until you’re full retirement age to file. We will always pay your own retirement benefit first. If your benefits as a spouse are higher than your own retirement benefits, you will get a combination of benefits equaling the higher spouse benefit. However, the spouse’s benefit cannot exceed one-half of your husband’s full retirement amount (not his reduced benefit amount). So, you can only receive additional spouse’s benefits if your own full retirement benefit (not your reduced benefit) is less than half of your husband’s full retirement benefit.
Generally, during the initial interview when applying for Social Security benefits, we typically explore all other benefits that could yield you a higher benefit amount. To find out if you are eligible for a higher benefit amount, you can call us at 1-800-772-1213 or you can contact your local Social Security office. Please look for the general inquiry telephone number at the Social Security Office Locator. The number may appear under Show Additional Office Information. Please be aware that our call wait times are longer than normal. We hope this information helps.
Daniel M.
Hello, I will reach FRA 9/30/20 at 66 yrs old, in applying for retirement benefits do put that I want benefits to start 9/2020 or 10/2020 in order to receive full payment?
Thank You.
A.C.
Hi, Daniel. Thanks for your question. If your full retirement age is 66 and you turn 66 on September 30, 2020, for example, you will attain your full retirement age in September 2020. However, when you delay collecting benefits beyond your full retirement age, the amount of your retirement benefit will continue to increase up until age 70. There is no incentive to delay claiming after age 70. For more information, visit here. We hope this helps.
John H.
Does somenone who wishes to receive the maximum social security benefit at age 70 need to wait until their 70th birthday, or is their benefit based on the calander year in which they turn 70?
V.V.
Hi John, thanks for your question. Your year of birth and the number of months you delay determines how much your benefit increases. ‘Check out our online delayed retirement credit calculator to show you the monthly percentages based on your year of birth. We hope this is helpful!
Donna A.
I retired from working June 19,2020 and starting receiving social security payments.do i I need to notifying the social security office of the date of retirement as my income will change.
Thank you
V.V.
Hi Donna, thanks for using our blog. Any change that can affect your payment amount should be reported. You can call us at 1-800-772-1213 for assistance or you can contact your local Social Security office. Please look for the general inquiry telephone number at the Social Security Office Locator. The number may appear under Show Additional Office Information. Please be aware that our call wait times are longer than normal. We hope this information helps.
La N.
I am a little confused about things’ work. I am a divorced woman and was told I can receive benefits from my ex. Do I have to be 62 or older to receive my ex’s social security benefits? He retired early this year at the age of 60. I was wondering since I am younger age 50 do I need to wait until I reach 62 to receive benefits from him?
A.C.
Hi, La Nell. Thanks for your questions. To be eligible for divorced spouse benefits, you had to be married to your former spouse for at least 10 years, be at least age 62, and you cannot be eligible for a higher benefit on your own record. For more information on how to qualify for divorced spouse benefits, visit our Benefits Planner: If You Are Divorced. We hope this helps.
Allen L.
It would be nice if the info wasn’t 3 years old.
Geralyn M.
I am 62 and recently applied for social security benefits. My job at a golf course is of a seasonal nature, some months, I only work 12 hours per week, but during the summer it may be 30 or more hours per week. How does Social security adjust for that? I predict that My total earnings per year should not exceed the allowed limits.
A.C.
Hi, Geralyn. We count your earnings for the entire year regardless of when they are earned. Check out how work affects Social Security payments here. We hope this helps!
wimpy c.
is there a certain amount you can make in the year you retire from working before your retirement benefits start