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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victoria f.
Yes . I was born in 1953 and am planning to retire. If I decide to work do I have a limit on earnings at full retirement age. Would I be taxed on my full retirement benefit or taxed only on my additional earnings?
A.C.
Hi, Victoria. Thanks for your question. You can work while you receive Social Security retirement benefits. At 66, you’ve reached your full retirement age. If you work and are full retirement age or older, the amount you make at work will not affect your Social Security benefits, no matter how much you earn. Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits. See our Benefits Planner: Income Taxes and Your Social Security Benefits for more information. Thanks, again.
james m.
does ss provide silver sneakers benefits at my local ymca
Jo A.
Is there a age that I can go back to work and it not matter how much money I make?
A.C.
Hi, Jo Annn. When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn. For more information, check out our publication, How Work Affects Your Benefits. We hope this helps.
John H.
But do I still have to pay taxes on on SSI regardless of my income?
Randy L.
How do I calculate how much I can earn since I am drawing benefits? There is a problem with my sign in account.
A.C.
Hello, Randy. Thanks for your question. If you are receiving retirement benefits, check out our publication, How Work Affects Your Benefits.
If you are referring to Social Security disability benefits, special rules allow you to work temporarily without losing your monthly Social Security disability benefits. After your nine-month trial work period, we still provide a safety net that allows you to work another three years risk free. During those three years, you can work and still receive benefits for any month in which your earnings do not exceed a certain limit. For 2019, those limits are: $2,040 for blind individuals; or $1,220 a month if you are not blind. For more information on working while receiving Social Security disability benefits, check out our Frequently Asked Questions.
Whether you are receiving Social Security or SSI, you may be able to work. Learn more information by reading our publication, Working while Disabled- How We Can Help. We hope this helps.
Bill
If I stopped working at age 60, does the FRA amount displayed on my statement at age 60 gets reduced each year because I do not have earned income towards my FRA?
Peggy J.
Why did I not receive the 2.8% raise like others did starting January 2019.
D.C. O.
It is my understanding that, as I am 66 (on Sept 9,2018 -born 1952) I can collect either all of my social security benefits or 1/2 of my Ex-Spouse’s who is 69 (born Jan. 21st,1949). My question has no answer anywhere that I can see..1.) “How do I find out WHAT the AMOUNT of my Ex-Spouses benefits are so I can determine which is the higher amount, mine or his?” 2.) Also is it true that I can collect 1/2 of my Ex-Spouses S.S. Benefit until I am 70 & anytime prior70 switch to my (full) benefits including an 8% per year increase, from my age of 66? Thank you for your reply in advance.
K.O.
Hello D.C., thank you for your question. You may be able to get spouse’s benefits but, under existing law, if you are eligible for benefits both as a retired worker and as a spouse, you must apply for both benefits and you’ll receive the higher of the two benefits. This requirement is called “deemed filing” because when you apply for one benefit you are “deemed” to have also applied for the other.
However, if you turn 62 before January 2, 2016, deemed filing rules will not apply if you wait to file at your full retirement age or later. This means that you may file for either your spouse’s benefit or your retirement benefit without being required or “deemed” to file for the other. See our Deemed Filing For Retirement And Spouse’s Benefits FAQs web page for details.
As to your second question, your benefit percentage is based on your full retirement age. If you delay filing, your retirement benefits will increase a fraction of a percent for each month after you reach full retirement age that you do not claim them until you reach age 70 due to delayed retirement credits. There is no incentive to delay claiming after age 70.
Please visit our Social Security Retirement Planner for more information.
LUIS H.
Thank you that information. However, the test did not answer why my benefit payment are being withheld because I continued to work partime.I have called the SSA and gone to an office. No one seems to be able to clearly understand what’s going on in my case. I need your help. Here are the circumstances.
1. My employment termination date was 4/29/18.
2. SSA benefits started in May 2018. .
3. Started to work partime 23 hours a week in the month of May.
4. Wages earned from May 1 thru Dec 31, 2018 are approx. 33,000.00. I don’t know why the office called Western Program Service Center in Richmond, CA. believes my earnings are slightly below 48K.
5. Wages in excess of 17,040.00 are 15,060.00 (33,000 less 17,040 = 15,060).
6. I owe the SSA one dollar for every two dollars earned over 17,040.00, which equals to 7,980.00.
The Western Program Service Center in Richmond, CA. is saying that I owe 13,937.00.
Could you please explain why I’m being denied benefits? What’s the situation is in my case?
Thank you for your assistance and understanding in this matter.
LUIS H.
Does did SSA have an earning test calculator for people that are not under the age of FRA?
V.V.
Hi Luis, thank you for your question. The earnings test calculator is for anyone that is receiving retirement or survivors benefits. However, beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
Luis H.
H,
I am 64 years old. I applied for SSA benefits in May 2018. My monthly benefit is $1990.00 per monthly. I had planed to retire completely on 4/3/2018, however, my boss suggested that I consider partime work as an option to balance my live and work life. I decided to give it a shot.. So far it’s been okay until I recently received the attached ssa notice that says I owe then 14k and future benefits are zero.
I fully understand that once you go over the 17,040 or 1420 monthly limit that you are required to payback ! dollar for each dollar earned over $17040.
Here my contention. I earned wages of $24,775 from 1/1/18 thru 4/30/18 before receiving any benefits from. The total estimated wages for 2018 are $57,130. I arrived at wages earned while received benefits from May thru Dec to be $32, 355 ( 257130 less $24775 = 32,355). I then applied the $17040 limit against wages of $32,355 to arrive at the wages in excess for $17,040. The SSA calculation is saying that I owe SSA $13.937 for May thru Nov benefits payment. I have called the SSA and also visited their office to get a better understanding of how the caculations are determine. Unfortunately, most staff members are not that knowledgeable in this area. Could you please explain this to me?