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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Joan B.
I am 70 years old and working. How much canI make and not be penalized by social security?
L.A.
Hi Joan. At age 70, you have already reached your full retirement age, which means that you may work and earn as much as you can, and the income will not affect the amount of the Social Security benefits that you receive. For more information, please see our publication titled “How Work Affects Your Benefits.” We hope this helps.
Gail D.
How can I sign up for the silver sneakers club?
Joni G.
Does a government pension amount count as income for the earnings limit? also does a private pension count?
L.A.
Hi Joni. Thank you for your question. Government pensions do not count as income for earnings limit, but could affect how we calculate your benefit amount, resulting in a lower Social Security benefit than you otherwise would receive. This is called the Windfall Elimination Provision (WEP). A pension based on work that is not covered by Social Security (for example, Federal civil service and some State or local government agencies, such as police officers and some teachers) may cause the amount of your Social Security benefit to be reduced. For more information see our internet page titled Benefits Planner: Retirement. We hope this helps.
Charles R.
I am a CSRS retiree. I was looking for the Wind Fall elimination Tax Info.
A.C.
Hi, Charles. A pension based on work that is not covered by Social Security (for example, Federal civil service and some State or local government agencies, such as police officers and some teachers) may cause the amount of your Social Security benefit to be reduced. Your benefit can be reduced based on one of two provisions: The Government Pension Offset and the Windfall Elimination Provision. To learn more, please visit here. For any income tax questions, you will need to contact the Internal Revenue Service (IRS). Their toll-free number is 1-800-829-1040 or you can visit their website. We hope this helps.
Judy C.
I am 67 now and want to know how much I can earn each month, if I decide to go back to work, while receiving social security benefits. In other words, what is the maximum amount I can earn each month, if I choose to go back to work without being penalized?
A.C.
Hi, Judy. If you were born between 1943 and 1954, then your full retirement age is 66. If you work and are full retirement age or older, you may keep all of your benefits, no matter how much you earn, starting with the month you reach your full retirement age. Please visit our Retirement Planner: Getting Benefits While Working for more information. We hope this helps.
Diane W.
I wanted a set amount or percentage of w ok allowed. I can’t find it.
Debra S.
Why were we denied the first 5 months payments of disability insurance?
Terald P.
I recieved a severance package from my employer when my job was eliminated. I also recieved a small amount of money from our state retirement at the same time. It was at this time that I applied and started recieving my SS.
Later that year I worked for the same employer in a different job for about 2 1/2 monthes. Due to the severance and retirement money I was over the limit on income while drawing my SS.The local SS office is saying that because I worked for the same employer in the same year is why I have to repay overpaid SS.
This was the same employer but two completely different jobs, wages and benefits since the previous job was eliminated. This is what the SS office couldn’t figure out;
They told me the rule is that the severance/retirement money cannot be disregarded from my income if I had work for the same employer afterwards. But, they “thought” it would have had to be doing the same job…?
A.C.
Hi, Terald. If your earnings are over the limit for the year but you first retired for part of the year, we have a special rule that applies to earnings for one year. Please visit our Retirement Planner: Getting Benefits While Working for more information. If you have specific questions about your situation, please call our toll-free number at 1-800-772-1213 and speak with one of our agents. Representatives are available Monday through Friday, between 7:00 a.m. and 7:00 p.m. Or contact your local Social Security office directly. We hope this helps.
Leslie M.
can SS benefits be reduce do to a sale of a home? And if so for how long?
Darlene L.
how many hours a week can i work. i want to get a job and i’m 68 collecting social security
A.C.
Hi, Darlene. You can work while you receive Social Security retirement (or survivors) benefits. At 68, 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. Thanks!