The Social Security earnings test for people at full retirement age

Updated 06/03/2011    www.ssa.gov

What is the earnings test for people at full retirement age (FRA)?

Only earnings before the month of FRA count towards the earnings test.  Earnings in the month you reach FRA and after do not count towards the earnings test.

The Senior Citizens’ Freedom To Work Act of 2000 eliminated the Social Security annual earnings test and the foreign work test in and after the month a person attains FRA. The FRA was age 65 in 2000 through 2002, but began increasing beginning in 2003.

If you are under FRA when you start getting your Social Security payments, we will deduct $1 in benefits for each $2 you earn above the annual limit.  In 2011, the limit is $14,160; for 2010, the limit also was $14,160.  In the calendar year you attain FRA, we will deduct $1 in benefits for each $3 you earn above a higher annual limit up to the month of FRA attainment.

For 2011, the limit is $37,680; for 2010, the limit also was $37,680.

Examples: When you work and get Social Security at the same time Updated: January 04, 2011
You can continue to work and earn above the annual earnings limit and still get some of your benefits.Let’s look at a couple of examples: You are receiving Social Security retirement benefits every month in 2011 and you

You work and earn $23,760 ($9,600 over the $14,160 limit) during the year. Your Social Security benefits would be reduced by $4,800 ($1 for every $2 you earned over the limit), but you would still receive $4,800 of your $9,600 in benefits for the year. ($9,600 – $4,800 = $4,800)

  • Reach full retirement age in August 2011. You are entitled to $800 per month in benefits ($9,600 for the year).

You work and earn $62,000 during the year, with $39,690 ($2,010 over the 37,680 limit) of it in the 7 months from January through July.

  • Your Social Security benefits would be reduced through July by $670 ($1 for every $3 you earned over the limit). You would still receive $4,930 out of your $5,600 benefits for the first 7 months (January through July). ($5,600 – $670 = $4,930)
  • Beginning in August 2011, when you reach full retirement age, you would receive your full benefit ($800 per month), no matter how much you earn.

      When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit 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.

      Also, as long as you continue to work and receive benefits, we will check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.

      In addition, after you reach full retirement age, we will recalculate your benefit amount to give you credit for any months in which you did not receive a benefit because of your earnings. We will send you a letter telling you about any increase in your benefit amount.

      If you are eligible for retirement benefits this year and are still working, you can use the SSA earnings test calculator to see how your earnings could affect your benefit payments.

      http://www.socialsecurity.gov/OACT/COLA/RTeffect.html