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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Sheryl S.
I have been on disability for 10 years and now will turn 65 in 2021. What do I need to do to go from disability to regular social security benefits?
Vonda
Hi Sheryl, thanks for using our blog. When you receive disability benefits under the Social Security Disability Insurance (SSDI) program, we will automatically convert your disability benefits to retirement benefits, when you attain your Full Retirement Age. The benefit amount will generally remain the same.
KEITH N.
I turned 66 in January, 2020 and began receiving benefits in February but continuing to work. What is my earnings limit for 2020?
Vonda
Hi Keith, thanks for using our blog. The amount you’re allowed to earn while receiving benefits depends on your age. If you attain 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’re under full retirement age for the entire year, then we deduct $1 from benefit payments for every $2 earned above the annual limit. For 2020, that limit is $18,240.
Visit our Receiving Benefits While Working web page for more details.
Luis f.
hi I am ssdi and I would like to know how much limit for work in new 2021 and no overpayment how much limit work ? thank you
Vonda
Hi Luis, thank you for your question. Social Security has special rules that make it possible for people with disabilities receiving Social Security Disability (SSDI) or Supplemental Security Income (SSI) to work and still receive monthly payments. These are called work incentives.
For SSDI beneficiaries, there is a Trial Work Period (TWP) and then an Extended Period of Eligibility (EPE). The TWP allows you to test your ability to work for at least 9 months. During this period, you will receive your full disability benefit regardless of how much you earn as long as your work activity is reported and you continue to have a disabling impairment. In 2021, any month in which earnings exceed $940 is considered a month of the 9-month trial work period.
Once you’ve completed your TWP, you get a 36-month safety net called the EPE. During the EPE, you get benefits for all months your earnings or work activities are below the Substantial Gainful Activity (SGA) level as long as you continue to have a disabling impairment. Social Security will suspend cash benefits for months earnings are over SGA and start benefits again if earnings fall below the SGA level. In 2021, you are earning SGA if your earnings, after any allowable deductions, are more than $1,310 in a month.
Check out Social Security’s Red Book for descriptions of the many work incentives.
Susan S.
I am collecting Social Security and am 63. I am still working part time. My question is can I earn in 2021 $18,960 in the first few months of 2021 or do I have to limit the income to $1,580 per month? I don’t want to reduce my Social Security payment.
Vonda
Hi Susan, thanks for using our blog. If you are under full retirement age for the entire year, then we deduct $1 from benefit payments for every $2 earned above the limit for the year. It doesn’t matter how much you make per month. For 2021 that limit is $18,960. There is a special earnings limit rule where it is based on your monthly income but that is for those that retire mid-year and have already earned more than the yearly earnings limit.
Check out our Receiving Benefits While Working web page provides more details.
Maria L.
I turned 66 last september, when is the best month to apply to receive full retirement benefits?
Thank you!
Vonda
Hi Maria, thank you for using our blog to ask your question. At Social Security, we’re often asked, “What’s the best age to start receiving retirement benefits?” The answer is that there’s not a single “best age” for everyone and, ultimately, it’s your choice. The most important thing is to make an informed decision. Base your decision about when to apply for benefits on your individual and family circumstances.
As an individual, you have four basic choices when it comes to work and retirement. Consider the four options laid out in our benefit matrix to help you make the best decision for you.
You can apply four months before you want your Social Security retirement benefits to start. Once you’re ready to apply, the easiest way to complete your application is online.
If you need further assistance, 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.
Judith W.
I will reach FRA at 66 2 months in February 2022. I will be 65 on this December. If I want to pull my SS in September of 2021, what is my earning limit for 2021? Would my benefit be reduced just until my FRA is reached? Thank you.
Vonda
Hi Judith, thanks for using our blog. You can get Social Security retirement or survivors benefits and work at the same time. However, there is a limit to how much you can earn and still receive full benefits. The amount you’re allowed to earn while receiving benefits depends on your age. If you attain full retirement age in 2021, the earnings limit is $50,520 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’re under full retirement age for the entire year, then we deduct $1 from benefit payments for every $2 earned above the annual limit. For 2021, that limit is $18,960.
Visit our Receiving Benefits While Working web page for more details.
Velma D.
Hi! I am 63yrs & 6mos old.
I realize that the first check will possibly be issued in 2021/ However, What is the last day I can apply for social security in 2020?
Thanks!
Kate
I turn 66 on Dec 11th. I want to be able to use my ex-husband’s social security until I turn 70. I’m a bit confused as to how this works. I was filling out my application online but there is no option for that. Also, if I use his now does that mean I am officially retired or can that be put off til I’m 70?
Vonda
Hi Kate, thank you for your question. You may be able to get divorced spouse’s benefits but, under existing law, if you’re eligible for benefits both as a retired worker and as a divorced spouse, you must apply for both benefits and you’ll receive the higher of the two. This requirement is called “deemed filing” because when you apply for one benefit you are “deemed” to have also applied for the other.
There is an exception to deemed filing for those who turn 62 before January 2, 2016. Check out our Deemed Filing For Retirement And Spouse’s Benefits web page for details.
Beth
Can you please tell me if you receive benefit off of your parents and your under 18yrs old do you need to report it? What rules apply as earning limits
Vonda
Hi Beth, thanks for using our blog. The earnings limit in 2021 is $18,960. If you anticipate earning above the limit, you need to call us. Visit our Receiving Benefits While Working web page for more details.
Melissa
Can I receive Social security to take care of my disabled husband who is on disability?
Vonda
Thanks for your question, Melissa. We do not pay caregivers. However, you may be eligible to receive social services from the state in which you live. These services include free meals, housekeeping help, transportation, or help with other problems. You can get information about services in your area from your state or local social services office. You can also visit the U.S. Department of Health and Human Services web page for more information. Thanks.
Keith h.
Please explain why there is an earnings limit (cap). I have looked everywhere for an answer. I want to receive my retirement and continue to work before my FRA. It would seem that a penalty is uncalled for since I would continue to contribute
Vonda
Hi Keith, thanks for using our blog. You can get Social Security retirement or survivors benefits and work at the same time. But, if you’re younger than full retirement age, and earn more than certain amounts, your benefits will be reduced. The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings. Check out our publication How Work Affects Your Benefits for more details.