How earnings affect your Social Security benefits

Did you know that you can continue to work and still get Social Security retirement benefits, when you reach your full retirement age? The full retirement age is 66 for people born in 1943-1954 and will gradually increase to 67 for people born in 1960 or later.

•However, if you’re younger than full retirement age, $1 will be deducted in benefits for each $2 in earnings you have above the annual limit ($15,720 in 2016).

•In the year you reach your full retirement age, SSA reduces your benefits $1 for every $3 you earn over the prorated limit ($41,880 in 2016) until the month you reach full retirement age. Then you get your full Social Security benefit payments, no matter how much you earn

There is special Monthly Rule that applies to people who retire mid-year and have already earned more than the yearly earnings limit. 

Please look over your Earnings Statement or go on their website(SSA.gov) to make certain that all of your earnings were reported correctly. The SSA get that information from:

•The earnings your employer reports on your W-2

•Your self-employment earnings reported on your income tax return

You need to report your earnings to SSA after the end of the year only if:

– You’re eligible for the special monthly rule and you earned less than the monthly limit.

– Some or all of the earnings shown on your W-2 weren’t earned in the year reported.

– Your wages were over the limit, and you also had a net loss in self-employment.

– Your W-2 shows employer-reported wages that you’ll include on a self-employment tax return.

If your benefit amount had to be adjusted based on your report, the SSA will  inform you. You must review your earnings report very carefully.