How Much Can I Earn Before It Affects My Social Security Benefits? Q & A

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How Earnings Affect Retirement Benefits

Will The Amount I Earn Affect My Social Security Benefits?

You are permitted to collect Social Security retirement benefits while you are employed. Your earnings, in and after the month you reach your full retirement age, will not affect your Social Security benefits.

However, the Social Security Administration (SSA) will reduce your benefit amounts if your earnings exceed a certain amount in the months before you reach your full retirement age.

First we need to define your “full retirement age”

What is my full retirement age?

According to SSA the full retirement age is 66 for people born between 1943-1954 and gradually increases to 67 for people born in 1960 or later.

If you’re younger than the full retirement age, SSA will deduct $1 in benefits for each $2 in earnings you have above the annual limit. As of 2015 the gross annual limit is $15,720 in earnings.

In the year you reach your full retirement age, SSA will reduce your benefits by $1 for every $3 in annual earnings over $41,880 until the month you reach full retirement age. After that, you will be entitled to receive your full Social Security benefits no matter how much you earn.

If you are younger than your full retirement age and some of your benefits are withheld because your annual earnings are more than $15,720, the SSA will recalculate your earnings and increase your benefits to factor in those months in which you did not receive full benefits.

If you would like more on  information we recommend you read: How Work Affects Your Benefits 

(usa.gov)

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