Q: In 2015, how much can I earn before my Social Security retirement is reduced?
A: The annual retirement earnings test concerns how your own employment earnings in a year affect your Social Security 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 applicable.
Three annual earnings levels exist, all based on your full retirement age (FRA). FRA depends on your year of birth. Learn yours here.
Earnings test amounts for 2015 have changed from 2014. 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 2015 limit of $15,720.
- If you reach FRA in 2015, $1 in benefits will be deducted from each $3 earned above the 2015 limit of $41,880, but only for earnings before the month you reach FRA.
- No earnings limit exists starting with the month you reach full retirement age.
Are you starting Social Security retirement in 2015? People retiring mid-year may have already earned over the annual limit for their age. To allow the start of SSA retirement regardless of expected calendar year earnings, there is a special one-time rule based on monthly earnings. This applies for one year, usually the first year of retirement, and lets people receive Social Security for months that they are retired.
For example, a person retiring in 2015, at least age 62 but younger than full retirement age the entire year, can receive retirement for months that gross wages do not exceed $1,310 even though calendar year earnings will be above retirement test amounts. Similar rules apply for self-employment.
Consider the retirement earnings test before beginning Social Security. If your plans include working part-time, will those earnings reduce benefits for the year? Can you limit your earnings to stay below earnings test levels? Is retiring with part-time work your best option or should you continue working full time, without SSA benefits, for the immediate future? Keep in mind that Social Security retirement is permanently reduced if started when younger than FRA.
Learn about the earnings test, including the special, one-time, monthly test, at www.socialsecurity.gov/retire2/whileworking.htm. Examples of how the earnings test is applied are there.
Reminder: Do you receive Social Security now? Do you expect to earn over your applicable earnings test amount in 2015? If so, provide your estimated earnings amount to SSA early in the year so that benefits can be adjusted in advance to avoid incorrect payment. You can change estimates as needed.
The earnings test does not apply to people receiving SSA benefits due to their own disability. If receiving due to disability, contact Social Security before working.