Q: I am 64, work part-time and receive Social Security retirement. In 2015, I will earn more than expected. Should I update my earnings estimate with Social Security?
A: You probably should but it depends on what your original estimate was and what your current estimate is.
Gross wages or net self-employment earnings in a year can reduce benefits for the year until full retirement age (FRA). If expecting earnings over the 2015 limits for your age, update your earnings estimate now.
At age 64, which is younger than your FRA, the 2015 earnings limit is $15,720. Earnings over this will reduce benefits. Lower earnings will not.
If your current 2015 earnings estimate is over $15,720, you should definitely contact Social Security and update your estimate. On the other hand, if you originally expected to earn $10,000, but will actually earn $14,000, an updated estimate is not needed because both amounts are less than the $15,720 limit for 2015 and neither would reduce benefits payable this year.
Earnings test amounts vary based on your age compared to your full retirement age. Details about 2015 earnings limits for different ages are in the SSA retirement planner section, www.socialsecurity.gov/planners/retire/, and in publication 05-10069, How Work Affects Your Benefits, also in that section. Pensions and other non-employment income do not count for the earnings test.
If younger than full retirement age for all or part of the year, keeping your estimated calendar year earnings current with Social Security is important if you expect to earn over the earnings limit. This is especially so if your original estimate was below the limit and you will actually earn over it. You can update your estimate anytime during the year.
If you will earn more than originally estimated, and the amount is above your earnings test limit, updating your estimate now can prevent or reduce the chance of your being incorrectly paid and needing to refund money to Social Security.
If you originally expected to earn above your 2015 earnings test amount limit, but will really earn less, updating your estimate now can release any withheld benefits to you faster.
If your final earnings this year are over the annual limit for your age, report actual 2015 amounts directly to Social Security when you get your W-2 form, or if self-employed when you complete your taxes. This is different from tax filings.
The earnings test can apply to anyone younger than full retirement age if receiving Social Security benefits that are not based on their own disability. Separate rules apply to people receiving benefits because of their own disability. If working, they should contact Social Security for information.
Earnings test information for 2016 should be available during October.
See “What You Need To Know When You Get Retirement or Survivors Benefits” for other things to report. Call Social Security nationally at 1-800-772-1213 (TTY-1-800-325-0778) or contact your local office to report changes including your earnings estimate.