When you retire, you can still choose to work while receiving benefits from the Social Security Administration. However, your retirement age and income amount determine whether you receive 100 percent of your Social Security benefits or a reduced amount. As of 2019, income limits have changed, but the youngest age you can begin receiving Social Security benefits remains at 62.
How much you can earn while drawing on your Social Security benefits is dependent upon your retirement age.
Earnings Limits for Retirement Benefits
- Full retirement age. Beginning with the month that you reach full retirement age, which depends on your birth year, you can make unlimited income without any reduction in your Social Security benefits. You will continue to pay Social Security taxes on your earnings, even if you're receiving benefits.
- Under full retirement age for the entire year. If you haven't yet reached full retirement age, you can earn up to $17,640 in income each year without any reduction in benefits. But for each $2 you earn above this limit, the Social Security Administration deducts $1 from your benefit payments.
- Under full retirement age for part of a year. If you will reach full retirement age in 2019, you can earn up to $46,920 with no benefit reductions in the months leading up to the month you reach full retirement age. If you exceed this income limit, the Social Security Administration will deduct $1 for each $3 you earn above the limit. Beginning with the month in which you reach full retirement age, you can make unlimited income and receive full Social Security benefits without any reduction.
You can use the Social Security Administration's Retirement Age Calculator to determine your full retirement age. Visit SSA.gov, click on "Search" in the top menu and type in "retirement age calculator."
How the SSA Defines Earnings
The Social Security Administration does not classify all sources of your income as "earnings" when calculating any potential benefit reduction.
- Considered earnings: Wages from an employer (or net earnings if you're self-employed), bonuses, commissions and vacation pay.
- Not considered earnings: Annuities, interest income, investment income, pensions and veterans, government or military retirement benefits.
Calculating Self-Employed Net Earnings
As a business owner, only your net earnings count as income for Social Security benefit purposes. You're allowed to subtract your allowable business deductions and depreciation costs from your gross earnings. Other types of income are also not included, such as stock dividends and interest on bonds, unless you are a dealer in these stocks or securities; interest from loans, unless your business is a lending company; and income that you received from a limited partnership.
Earnings Limits For Disability Benefits
If you continue to work while receiving disability benefits, you may qualify for unlimited earnings and full Social Security benefits during a trial period of up to nine months. After this nine-month period, the Social Security Administration will re-evaluate your status to determine whether you continue to qualify for disability benefits or other benefits as you transition back to working. Contact the Social Security Administration by visiting SSA.gov or calling 1-800-722-1213 to determine your eligibility for disability benefits.
Earnings Limits For SSI
Although the Social Security Administration manages the Supplemental Security Income program, the U.S. Treasury pays for this program, not Social Security taxes. The Supplemental Security Income program sends monthly payments to qualifying people who are 65 or older, disabled or blind.
Monthly income limits for Supplemental Security Income in 2019:
- An individual whose income is solely from wages: $1,627
- An individual whose income is not from wages: $791
- A couple whose income is solely from wages: $2,399
- A couple whose income is not from wages: $1,177
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.