Retirement

How the Rules Work for You

July 12, 2018 • By

Last 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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About the Author

Jim Borland, Acting Deputy Commissioner for Communications

Comments

  1. Edmund I.

    Thank you for the most confusing thing I have ever read.

  2. Sharon L.

    How does that apply to someone who’s been on SS disability for 20 yrs?

  3. earl d.

    i am on ss my age is 72 i have just become disable can i switch from ss to disabale payment

    • Ray F.

      Hello Earl. Social Security disability benefits automatically change to retirement benefits when disability beneficiaries attain their full retirement age.
      If a person has reached his or her full retirement age and is receiving Social Security retirement, they will not be eligible for disability benefits.
      Thanks!

  4. Karen H.

    What is a restricted application. It talks about “giving up some benefits”. Do I have to be full retirement age when applying and collecting on my husband’s SS while mine continues to grow. Something doesn’t sound right.

  5. Sherry D.

    I’m on Ssi and want to go back to school for my GED and im looking for a grant.

  6. Richard W.

    I am at FRA, will I continue to get SS yearly increace if I am working full time and I get a raise in salary?

  7. Arline F.

    set up account some time ago on MY SOCIAL SECURITY .NET and wrote down username and password. Visited it once or twice and got on o k. Now I can’t get back on! How do delete that account and set up another one HELP !!

    • Ray F.

      Hello Arline. If you are unable to create an account or encounter a problem with your my Social Security account, you may:
      •Call us at 1-800-772-1213 (TTY 1-800-325-0778), Monday through Friday from 7 a.m. to 7 p.m. At the voice prompt, say “helpdesk”; or
      •Contact your local Social Security office. Thanks!

  8. Terri P.

    Could you explain how this earnings rule applies to a beneficiary who is recieving benefits thru disability and has not reached FRA yet?

    • Ray F.

      Great question, Terri. The rules are different for individuals receiving benefits under the Social Security Disability Insurance program and working.
      Social Security strongly supports those individuals who want to return to the work force while supplementing their disability benefit income.
      We have Work Incentives that allow people to work and still receive their benefits. However, their earnings cannot exceed a certain amount.
      This is called the Substantial Gainful Activity (SGA) limit. In 2018, the SGA limit is $1,180 per month (or $1,970 for blind applicants). In addition to the amount of money you make, Social Security may also look at the number of hours you’re able to work.
      We hope this information helps!

  9. thomas l.

    I need a new S-S card can u sent me one please

    • Ray F.

      Hi Thomas, we prefer a government issued document with your picture, as proof of identity to replace your Social Security card. If you do not have one or you cannot get one within a reasonable amount of time, we may be able to use other documents such as:
      •Employee identification card;
      •School identification card;
      •Health insurance card; or
      •U.S. military identification card.
      Any document you submit, must be an original or certified copy, current (not expired) and show your name, and other identifying information (date of birth or age).
      Also, realize that you may not need a replacement card. You will rarely need to show it. Knowing your Social Security number is what is important.
      To see if you’re eligible to apply for a replacement Social Security card online or to learn more on the process and what documents you will need to get a card, please visit our “Social Security Number and Card” web page.
      We hope this helps!

  10. P V.

    Thank you. Have been looking for work while disabled for five years! All to no avail. I’ll remember this while hoping to find a long term job.

    • Ray F.

      Ticket to Work service providers can help you connect to opportunities available to you in government hiring, opportunities with Federal Government contractors, and employers in the private sector.

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