Social Security Earnings Tests (US)

Maybe I misunderstood either your question or your second link. It sort of seems to have your answer. In any case, your links were more useful to me than I am going to be to you.

Thanks.

I am glad that you found the links useful Roger, and you are right, the second link does sort of answer my question.

This Q&A even looks a bit clearer IMO.



It seems clear to me that the intent of the monthly test is to enable benefits, not restrict them. The rub comes when dealing with the bureaucracy that makes the decisions. Of the four individuals at the SSA that I have presented this question to, only one has agreed with me.

I have also submitted this question to the SSA in e-mail form. Does anyone care to venture a guess as to what the answer will be?

At work, I deal with SSA in a different context. They have one answer; send them to the local office to get the SSN straightened out. Your question will probably have an equally standard, and useless answer.

To their credit, the local office was where I received the most reasonable and correct answer IMO.

I am confused on the earnings test because I do not see this example in Social Security's web site..

I start receving benefits in April 07. I have been working all year but I have reduced my working hours. I have not reached the yearly limit yet and I don't know if I will work all year. But what if I reach the yearly earnings limit in Sept. 07 and for all 12 months I have earned over the monthly limit. Let's say I earn $4,000.00 over the limit for the entire year.

How does the monthly test apply then and how much will I be penalized?

Little bit late here, but I found this in the Oct AARP newsletter

Reasons to starte later: You want to avoid the earnings penalty. People who take their benefits between 62 and full retirement age and continue to work musg give back $1.00 in benefits for every $200 they earn above the Social Secuirty earnings limit. In 2007, the limit is $12,960.00. However, in the year in which you reach full retirement age, Social Security will withhold $1.00 for every $3.00 you earn over the limit of $34,440. But that limit is in effect only until the month you reach full retirement age. After that, the limit goes away.

I would prefer to get such a clear statement from a more official source, but this is what I found, and where I found it.

Thanks roger. The AARP wording is clear, but the Social Security website states essentially the same thing.

If you will reach1 full retirement age in 2007, the limit on your earnings for the months before full retirement age is $34,440.
(If you were born in 1942, your full retirement age is 65 years and 10 months.)

Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.

You can work and get Social Security at the same time.

For me it is a done deal, and I did end up getting payments for the months in question, Jan, Feb, and Mar.

Here is what happened. I had previously had an interview with the local SSA office to enroll in Medicare and at that time I had a very knowledgeable representative recommend that I start my retirement payments in January. Since during that Interview I had all of my questions answered and all of the necessary documents were shown to them, I decided to just use the online enrollment.

Bad decision. There was a question... How much do you expect to earn in 2007? So I answered with a full years pay, a number that exceeded the annual earnings limit of $34440. I fully expected them to realize that since I reached full retirement age in April that only 1/4 of that pay would be earned before April. Nope. They sent me a letter stating that since I would be exceeding the annual limit, I would not receive any payments until April.

That began a long and frustrating exercise of getting wrong answers and non answers. A couple of them told me that even if I didn't exceed the annual limit, the monthly limit would apply and I exceeded that.

The situation was finally resolved buy the person in the local office that gave me my Medicare enrollment interview. That person was very sharp and helpful.