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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Ofelia A.
My 67 year old brother has recently receiving full retirement benefits while still working. Today, he had quadruple by-pass surgery. Can he apply for disability retirement? Is his wife entitled to receive benefit if he is receiving disability?
Thank you!
V.V.
Hi Ofelia, thanks for using our blog. When a person has reached their full retirement age (Currently 66) and is receiving Social Security retirement, they are no longer eligible for disability benefits. Thank you!
Maria R.
Hello, my auntie used to work and had contributed to SS thru employment but has been a housewife for so many years now. Can she contribute to her SS? And f so, how will she send her contribution?
V.V.
Hi Maria, thanks for using our blog to ask your question. Your aunt cannot get more credits by voluntarily contributing money to Social Security. She can earn credits only by working in a job or her own business that is covered under Social Security. We hope this helps!
Danny H.
I reach FRA at 66 and two months. My 66th birthday is in late October 2021. What date will I be considered to reach FRA, and what will my earnings limit be for 2021?
V.V.
Hi Danny. If you wait until your full retirement age, you will get your full benefit. If your full retirement age is 66 and two months, and you turn 66 in October, 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 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.
Visit our Receiving Benefits While Working web page for more details.
BARRY W.
I’m wanting to retire at 62 Feb 2021. It’s early but I want to keep working doing something different than what I am doing now. My estimated benefits are no problem and I don’t think I would make more than what the yearly income would allow! do you think it’s a good idea
K.O.
Hi Barry. Thank you for using our blog. As you know, the decision to retire is personal, based on your situation and, ultimately, it’s your choice. That said, you may benefit from reviewing our Benefits Planners for more insight. We hope this helps.
Bryan W.
I am within 3 months of turning 65 and am preparing to apply for Medicare, so I’m researching Medicare and SS both. Do I need to apply for SS now, even tho’ I don’t plan to take benefits until I’m 70?
K.O.
Hi Brian. Individuals within three months of age 65 or older and not ready to start their monthly cash benefits can use our online retirement application to sign up for Medicare ONLY and apply for their retirement benefits at a later date.
Since you must pay a premium for Part B coverage, you have the option of turning it down. However, we suggest that individuals speak to their health benefits advisor, or health plan representative to see what’s best for them, and to prevent any penalties or delayed enrollment in the future.
To learn more about the Medicare enrollment periods visit http://www.Medicare.gov, and read our publication “Apply Online for Medicare – Even If You Are Not Ready to Retire“.
We hope this information helps!
mitzi t.
I am 67 years old and am thinking about applying for Social Security. I have reach my Full retirement age, however, I do plan on still working. My question is, If I start my social security now at 67, continue to work till 70, will my estimated benefit at 70 stay the same or will it be reduced because I started taking benefits at 67?
Linda g.
I am FRA this month, 66. Dob Dec 1954, can I make as much as I want in 2021?
S.D.
Hi, Linda. Thanks for reading our blog and for your question. Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits. In 2021 and beyond, you may keep all your benefits, no matter how much you earn. For more information, check out our Receiving Benefits While Working web page. We hope this information is helpful.
David J.
I started retirement at 62, in 2016. I was trying to see what my income limit is now, thinking of working part-time.
S.D.
Hi, David. Thanks for reading our blog and for your question. The amount you’re allowed to earn while receiving retirement or survivors benefits depends on your age. If you’re younger than full retirement age, the 2021 annual earnings limit is $18,960. We will deduct $1 from your benefit payments for every $2 you earn above the annual limit. In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above $50,520 in 2021. We only count your earnings up to the month before you reach your full retirement age, not for the entire year. Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn. For more information, check out our Receiving Benefits While Working web page. We hope this information is helpful.
Barb
I want to clearly understand the spouse benefit. My husband retired approximately 2 years ago. I am still working and plan to work until age 65. At that time my SS benefit will be higher than what my husband currently receives. Will he be eligible for additional SS benefits since I will have the richer benefit? For example, if my projected benefit is $500 more than his, will his SS benefit increase?
S.D.
Hi, Barb. Thank you for reading our blog and for your question. We will pay your husband’s own retirement benefit first. If his benefits as a spouse are higher than his own retirement benefits, he will get a combination of benefits equaling the higher spouse benefit. However, his spouse’s benefit cannot exceed one-half of his own full retirement amount. So, he can only receive additional spouse’s benefits if his own full retirement benefit (not a reduced benefit) is less than half of your full retirement benefit. Check out our Benefits For Your Spouse web page for additional details.
Meredith L.
I am turning 70 in April of 2021. I have been receiving half of what my husband receives since I was 66. Am i allowed now to receive my total benefit when i turn 70.
S.D.
Hi, Meredith. Thanks for your question. You can apply for retirement benefits at age 70 to receive all the delayed retirement credits. 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 would rather not apply online, 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.