In 2013, how much can you earn before Social Security retirement benefits are reduced?
The annual earnings test, also known as the retirement test, concerns how your own employment earnings in a year affect your Social Security retirement, or other Social Security benefits, payable in that year. The earnings test includes only your personal gross wages or net self-employment for the full calendar year. Your other income, or income of a spouse, is not included.
Three annual earnings levels exist, all based on your full retirement age (FRA). If born in1943-1954, full retirement age is 66. Learn your FRA at http://www.socialsecurity.gov/retire2/.
Earnings test amounts for calendar year 2013 are changed from 2012. They are:
- If under full retirement age (FRA) for the entire calendar year, $1 in benefits will be deducted for each $2 earned above the 2013 limit of $15,120.
- If you reach FRA in 2013, $1 in benefits will be deducted from each $3 earned above the 2013 limit of $40,080, but only for earnings before the month you reach FRA.
- No earnings limit exists starting with the month you reach full retirement age.
Do you plan to start Social Security retirement in 2013? Often people retiring mid-year have already earned over the annual limit for their age. To allow the start of Social Security retirement regardless of expected calendar year earnings, there is a special one-time rule based on monthly earnings. This rule applies for one year, usually the first year of retirement, and lets people receive Social Security payments for months that they are retired.
For example, a person retiring in 2013, at least age 62 but younger than full retirement age the entire year, can receive retirement for months that gross wages do not exceed $1,260 even though calendar year earnings will be above retirement test amounts. Similar rules apply for self-employment.
Learn about the earnings test at http://www.socialsecurity.gov/retire2/whileworking.htm. At present, 2012 information is there, but this is where 2013 earnings test information will be located. Earnings test amounts for 2013 are included with changes related to the 2013 cost-of-living-adjustment (COLA) at http://www.socialsecurity.gov/pressoffice/factsheets/colafacts2013.htm.
More about the special, one-time, monthly test is at http://www.socialsecurity.gov/retire2/rule.htm.
The earnings test does not apply to people receiving SSA benefits due to their own disability. If receiving benefits due to your own disability, contact Social Security before starting to work.