Social Security: What happens to your benefits if you earn more

Informed about the process being undertaken Apply for and receive Social Security benefitsThey know that The amount awarded is based on the number of years of service and the highest salary Earned during this period.

The higher your wages, the more likely you are to reach the maximum benefits offered by the Social Security Administration (SSA), which will top out at $4,000 in 2023.

Some people apply for retirement benefits and continue working at the same time. To the SSA you are “once retired” once you start receiving retirement benefits. The current full retirement age (FRA) is 66 or 67 depending on the year you were born.

When can the SSA reduce your retirement income?

As explained by the SSA, if you have fewer FRA years, $1 is deducted from your benefits for every $2 you earn over the annual limit, which changes each year. In 2023, it will be $21,240.

Now, in the year you reach your FRA, benefits are deducted by $1 for every $3 you earn above the different threshold. In 2023, this limit is $56,520.

In order for the SSA to calculate how much to withhold from your benefits, the wages you earn from your full-time/part-time job and/or the income you earn if you are self-employed are taken into account. If he asks you and they only take your salary into account, the answer is no.

Bonuses, commissions and holiday pay are also taken into account. Conversely, pensions, annuities, investment income, interest, veterans’ benefits and other government retirement benefits are not taken into account.

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