Social Security Earnings Test — Annual earnings test
The earnings test reduces Social Security retirement benefits if you claim early and earn over a yearly limit. The reduction ends at Full Retirement Age.
Official source: ssa.gov
Hey there! Let's talk about something called the Social Security Earnings Test. It sounds a bit complicated, but it's really about how much you can earn from a job while also getting your Social Security retirement money. This test is important for people who decide to start taking their Social Security benefits before they reach what's called their "Full Retirement Age." Everyone has a Full Retirement Age, and it's usually between 66 and 67 years old, depending on the year you were born.
So, how does it work? Well, if you're taking your Social Security early, and you're still working and earning money, there's a certain limit to how much you can make each year. If you earn more than that limit, your Social Security benefit for that year might be a little bit smaller. It's not that they take away all your benefits, just a part of them. The good news is that once you reach your Full Retirement Age, this test stops completely. You can earn as much as you want from your job then, and it won't affect your Social Security retirement checks at all.
Think of it like this: Social Security wants to help you when you're older. If you're still working a lot and making good money before your Full Retirement Age, they figure you might not need your full Social Security payment just yet. But once you hit that special age, they consider you fully retired, even if you choose to keep working, and your Social Security payments are all yours, no matter how much you earn from other jobs.
In real life
- A 63-year-old who earns $30,000 may see part of their early retirement benefit withheld.
- Maria, age 64, works part-time and makes $25,000 annually, so her Social Security checks are a bit smaller for now.
- When Tom turned 62 and started his benefits, his extra income from freelance work meant he didn't get his full Social Security amount.
Also known as
Take the next step
Frequently asked questions about Social Security Earnings Test
What is Social Security Earnings Test?+
The earnings test reduces your Social Security retirement benefit if you collect early and earn over a yearly limit. The reduction stops at Full Retirement Age.
Who qualifies for Social Security Earnings Test?+
Workers who have earned enough Social Security credits, plus eligible spouses and survivors.
How do I apply for Social Security Earnings Test?+
Apply online at ssa.gov, by phone at 1-800-772-1213, or in person at your local Social Security office. There's no cost to apply. Official forms and instructions: https://www.ssa.gov/benefits/retirement/planner/whileworking.html.
Where can I get help?+
Create a free account at ssa.gov/myaccount to check your earnings record and benefit estimate. BenefitKarma's free Benefit Eligibility Screener can also point you to the right Social Security program.
Source: ssa.gov