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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Marilyn T.
If I am signed up to start receiving Social Security because of turning 62. When would my first check be issued? Would it be in the month I turn 62 or the first month after my birthday?
NT
I started receiving SS benefits at 64 yrs when I quit working. My FRA is 66. If I went back to work at 67 yrs old, would I still get my current SS benefits without a reduction?
Patty W.
I want to start getting my retirement benefits on my 66th birthday in a couple of weeks. I make 65,000 a year, will this interfere with my benefits and the application says it will list todays date as the application, is that an issue if I want to start it at 66?
V.V.
Hi Patty, thanks for using our blog. Our system is set up to take applications four months in advance of when you want your benefits to begin. You can apply for your retirement benefits online.
If your full retirement age is 66 and you turn 66 in the middle of December, you will attain your full retirement age in December. One exception to that is for individuals that are born on the 1st of the month. We figure their benefit (and their full retirement age) as if their birthday was in the previous month.
If you attain full retirement age (66) in 2020, the earnings limit is $48,600 but we only count earnings before the month you reach full retirement age. Beginning with the month you reach full retirement age, earnings no longer reduce your benefits, no matter how much you earn.
Denise K.
I have not reached FRA but receiving SS and just found out that I could be eligible to receive unemployment benefits. Will that effect the monthly amount of SS I currently get?
V.V.
Hi Denise, thanks for using our blog to ask your question. Unemployment benefits do not affect or reduce Social Security retirement benefits. State unemployment compensation payments are not wages because they are paid due to unemployment rather than employment. However, income from Social Security may reduce your unemployment compensation. Contact your state unemployment office for information on how your state applies the reduction.
Darlene V.
I set up a account using my email address and used the same email address for my husband, but when we tried to get in to check our accounts, it says he doesn’t exist, do you not recognize same email addresses.?
V.V.
Hi Darlene, thanks for using our blog. Sorry to hear your husband’s having difficulties creating or accessing his my Social Security account. If a family shares an email address, each person should be able to establish his or her own my Social Security account by listing the common email address. There is no registration exclusion related to email addresses.
For assistance with his account, he may call us at 1-800-772-1213 for assistance or he can contact his 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.
Bertha L.
Covid19 prevents my in person to apply for my FRA. Which will be due on my 70th birthday, Jan. 22, 2021. Please advise.
V.V.
Hi Bertha, thanks for using our blog. Our system is set up to take applications four months in advance, and when you’re ready, you can apply for your retirement benefits online.
If you are unable or do not want to apply for benefits online, you can schedule an appointment by calling 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.
william b.
if i earn more than the 2020 limit of $18,240 over my benefits and you deduct $1.00 for every $2.00 i earn over, is that deducted from my 2021 benefits in one lump sum or spread out over a period of time.
Linda A.
Can husband and wife receive their full benefits at FRA or is their a cap on what they can receive in same household.
V.V.
Hi Linda, thank you for your question. There is no marriage penalty or limit to benefits paid a married couple. If you are married and you and your spouse have both worked and earned enough credits individually, you will each get your own Social Security benefit. So, for example, if you are due a Social Security benefit of $1,200 per month and your spouse is due a Social Security benefit of $1,400 per month, the two of you will get $2,600 per month in retirement benefits. We hope this helps!
Ana D.
I got retired benefits at 62 when my husband died based on his work. I continued working and I am 70 years old. May I claim benefits based on my own work, any re-adjustment? Thanks for your answer.
JOHN A.
I would like to start cllecting in January 2021 my 66th birthday is April 2021 can I still make 43,000 without being taxed . And does that tax include what my wife makess?
V.V.
Hi John, thanks for using our blog. The amount you’re allowed to earn while receiving benefits depends on your age. If you turn full retirement age in 2020, the earnings limit is $48,600 but we only count earnings before the month you reach full retirement age. Beginning with the month you reach full retirement age, earnings no longer reduce your benefits, no matter how much you earn. If you were born in 1955, your full retirement age is 66 and 2 months.
Visit our Retirement Planner: Getting Benefits While Working and our Retirement Earnings Test Calculator.