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For 2016, the limit is $15,720. (The amount goes up each year.)

These things don't count towards the limit:

  • Pensions
  • Annuities
  • Investment Income
  • Interest
  • Government or Military retirement benefits

Earnings from current work count toward the reduction.

If you are collecting Social Security retirement benefits before full retirement age (for the full year), than anything over this amount will result in your Social Security payments being reduced by $1 for every $2 earned.

Example: You earned $16,720. That's $1,000 over the allowed limit. $1,000/2=$500. Your benefit will be reduced by $500 for the year.

The limit is higher during the year that you reach retirement age, and then, starting the month you reach full retirement age, you will receive full benefits with no limit on your earnings.

Here is something obscure that very few know:

There is a special rule that applies only in the year you turn Full or Normal Retirement Age (FRA or NRA). In that year only, the exemption amount that you are allowed to earn before work reductions is $41,880. (This is the 2016 number as it increases for inflation most every year.) If you earn over that amount, benefits are reduced one dollar for every three over that amount.

But the amount is pro-rated based on your birth date. (Exemption Amount = 12 divided by the number of full months that you will be younger than full retirement age times $41,880).

For those born in January or on February 1, full benefits are available for the whole year. Most people will collect full benefits if started in January while they are still age 65. In reality, the $41,880 applies only to those born in December.

This is important to know in advance because SSA will not give retroactive benefits for months that you are under age 66. You must call them by the end of January to protect these extra months!

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7y ago
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12y ago

After "full retirement" age (currently 66 for people reaching retirement this year) there is no limit. I am 67 and still earning in the six figure range and get full social security. People taking retirement at 62 can earn up to $14,640 without any reduction in their benefits; for income over that limit, benefits are reduced by $0.50 for every $1.00 earned. The ammount you lose is reduced on a sliding basis until at full retirement age there is no reduction.

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11y ago

That depends on the benefit laws in your country ! In the UK you can earn a small amount without it affecting your benefits but you must declare it. Additionally, benefit is reduced on a sliding scale depending on the amount you're earning. above a certain level, all benefits would stop.

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11y ago

what is the maximum pension you can earn before reducing social security benefits at age 65

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Q: How much can you earn before Social Security payments are reduced when you are working before full retirement age?
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What can they do if you draw SS and work part time just to make ends meet?

You can draw Social Security retirement benefits while working, but if you earn more than an annual limit in your work (which is $15,480 for 2014), your Social Security benefits may be slightly reduced. The amount of reduction can vary based on if you are under full retirement age, too. If you are under full retirement age for the entire year, your Social Security payment will be reduced by $1 for every $2 you earn above the annual limit. If you earn below that $15,480 amount, though, you will not face any reduction in SS payments. If you reach full retirement age in the year, your SS is reduced by $1 for every $3 earned above that annual limit. Once you reach that full retirement age, you will get full benefits no matter how much you earn.


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In general, the size of our Social Security retirement checks will depend on your lifetime earnings record and the age that you begin collecting your benefits. If you start collecting payments prior to reaching your Full Retirement Age (FRA) which for the most part is 66 or 67, depending on your year of birth, the amount of any work earnings beyond a certain threshold ($15,480 in 2014) will lead to a reduction in your benefit amount. However, Social Security's definition of earnings counts amounts you earn from working as an employee or net income from your self-employment, but not dividends and/or capital gains from your investments. So in a nutshell, dividends and capital gains do not affect your Social Security payments.


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