The Social Security Income limit is $18,960 for those who are under the full retirement age. In the year a person is due to reach full retirement age, a new income limit of $50,520 applies. Once a person reaches retirement age, earnings are no longer taken into account.
The income limits for Social Security are reviewed regularly. If someone is earning more than the income limits and files for benefits, they’ll have a portion of those benefits withheld based on their earnings. It can be difficult for some people, especially those who are nearing full retirement age, to decide whether it’s worth claiming Social Security or whether they should wait until they stop working, or earn less, to make their claim.
A person who is under full retirement age for the entire year can earn up to $18,960 before they start seeing deductions to their Social Security benefits. For every $2 a person earns over that annual limit, $1 is deducted from their benefit payments.
In the year a person is due to reach full retirement age, the income limit is changed to $50,520. For the purposes of benefit calculations, the government looks at the claimant’s income for the month up to when they reach full retirement age. For every $3 the claimant earns above the $50,520 limit, they have $1 deducted from their benefit payments.
When a person reaches full retirement age, a person can receive Social Security benefits even if they are working, and their income is not taken into account. Pensions, annuities, interest and other forms of income are all disregarded.
Many people choose to claim social security benefits when they’re approaching retirement, even if they are not eligible for the full amount. Social Security benefits are recalculated regularly, and when a person reaches full retirement age, they’ll have their benefit amount recalculated to credit them for any months that their benefits were withheld or reduced due to their income.
If you’re considering applying for social security, perhaps to help offset the cost of Assisted Living, seek advice from your local office or Area Agency on Aging. A benefits advisor can help you calculate how much you’re eligible for, allowing you to make an informed decision about applying for benefits before full retirement.