Question About The Annual Earnings Test

Q: I will reach age 66 in May 2014. Some friends told me that I could start collecting my full retirement as of January 2014 and still be able to work and make as much money as I can. Is this correct?

A: No. Your friends are wrong for two reasons. First, in January you will still be younger than your full retirement age (FRA) of 66 so a Social Security retirement benefit started then would be reduced for age. Second, the annual earnings test, also called the retirement test, applies until you reach FRA. Starting with the month you reach full retirement age, the earnings test no longer applies and then you can receive SSA retirement with no earnings limit. The earnings test applies for earlier months.

There are three different earnings test levels depending on if you are younger than full retirement age the entire calendar year, reach FRA in the calendar year, and once you attain FRA. Earnings test dollar amounts for 2014 are not known yet. 

Only gross wages or net self-employment income count for the earnings test. Usually the earnings test is based on calendar year earnings but a special one-time rule uses monthly rather than annual earnings. Use of this special rule allows benefit payment in the first year of retirement since people retiring mid-year often have earned over annual earnings limit amounts.

Tell your friends that accurate Social Security information is at  If using a search engine, make sure you go to the office Social Security website.