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. David E.

    This is about as clear as mud! Could you try to make any more complicated?

  2. Michael C.

    The Social Security Evaluation Process For Disability Recipients of ninety days is much too long. Social Security asked for information back after a few weeks. It should not take too long either!!

  3. Anna M.

    I was wondering, when I was 11 my mother passed. A older sibling was receiving my SS from my mothers SS for taking care of me. I was completely on my own by the age 15 working three jobs and attending High School. After I gradurated it was suggested that I go to a SS Office to see if I could get help for College. The individual at the Mesa, Az office asked me what had I done with all the money I was getting…very rudely. I asked what money? She proceed to tell me I was getting so much a month. I had no idea. She shooed me away and that was the end of our conversation. Could I’ve had done something legally to get those funds for college?

    • Ray F.

      Hello Anna, Generally, we pay Social Security benefits to the parent or the family member who is the primary care provider of the minor child, if the child lives with them. We called them Representative Payees. Your payee receives your payments on your behalf and must use the money to pay for all of your needs. If there is money left over, your payee should save it for you.
      If you suspect misuse of Social Security benefits, you can speak to one of our agents and you may file a report.
      Please call 1-800-772-1213 (TTY 1-800-325-0778) Monday through Friday, between 7 a.m. to 7 p.m. to speak to one of our representatives. Or you can contact your local Social Security office.
      Thanks!

  4. Wofford J.

    I am pleased with Social Security. The only rule I would like to see changed is the one that required me to take a penalty when I sold a rental home that I purchased in the !980’s.
    The sale increased my annual income for the one year and required me to suffer a penalty for an entire year of Social Security income. I don’t think that is fair. It was the only rental home I owned, so it will not happen again. This was for the year 2017.

    • Ray F.

      Thank you for your comment, Wofford. When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net earnings if you’re self-employed. We include bonuses, commissions, and vacation pay.
      We don’t count pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits. Visit our “Frequently Asked Questions” web page for more information. Thanks!

  5. Roberta E.

    I live in an assisted living facility (7,500) monthly, I am 83, is there any way I could get more assistance from social security; I get $1.600 monthly benefits from social security?

    • Ray F.

      Hello Roberta. Some individuals may be eligible to receive social services from the state in which they live. These services include Medicaid, 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. Or you can visit the U.S. Department of Health and Human Services web page for more information.
      We hope this information helps!

  6. Christine R.

    Hi , I have been approved for SSDI , I do not know when and amount of my benefit, I have received an aproval letter. 2 week’s ago, but no amount was on the letter

    • Ray F.

      Hi Christine. The length of time it takes to begin receiving payments after receiving a favorable decision varies. Approved claims are randomly selected for a quality assurance review of the decision.
      We care about our customers and are working as fast as we can.
      For security reasons, we do not have access to information about your account in this venue. In your situation, we encourage you to contact your local office or call our toll free number at 1-800-772-1213 (TTY 1-800-325-0778) and speak to one of our representatives. Representatives are available Monday through Friday between 7 a.m. and 7 p.m. Thanks!

  7. LISA D.

    YES I WOULD LIKE TO NO HOW LONG IS IT GOING TO TAKE FOR MY APPEAL I BEEN WAITING FOR 1 YEAR AND HALF THANK U

  8. Tyrese L.

    I want to apply for ticket to work….

  9. obbie

    work polices

  10. Esaucoleman

    I just want to know about what’s going on with my Social Security

    • Ray F.

      Unfortunately, and because of security reasons we do not have access to personal records in this blog and cannot answer your question at this time.
      Please call our toll free number at 1-800-772-1213 for assistance. Representatives are available Monday through Friday, between 7 a.m. and 7 p.m.
      Generally, you will have a shorter wait time if you call later during the day or later in the week. Thanks.

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