• Question
  • Timing of income in year of full retirement.

    Asked by someone from State College, PA on 3/12/2013

    I began benefits at full retirement age in June 2012. My earnings Jan thru May 2012 were $20000..I worked from July to Dec 2012 in a different job and earned $40000, July thru Dec.
    How does SSA know that most of my income was earned after my full retirement month? I receive W-2s and the timing of the earnings is not disclosed on these statements.

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  • Categories: Taxes, How Calculated?, Retirement Planning, Social Security, Work and Retirement, Guaranteeing Income

Answers

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  • Earnings after full retirement age (FRA) do not have a negative affect on your social security benefits. Earnings in the year of your full retirement age up to the month before you reach FRA will be accounted for in the reduction of your benefits. For 2012 there is an annual earnings limit of $38,880, this means that any earnings above this amount before you reach FRA will be deducted $1 for every $3 earned.

    According to the information you submitted and that giving on the Social Security Administration website we can create an example for you. If earnings in the months prior to reaching full retirement age were $20,000, which falls below the 2012 earnings limit of $38,880, then benefits will not be reduced. In the months after reaching full retirement age, earnings will not affect your benefits, no matter how much you earn.

    For greater detail into how SSA formulates your earnings and benefits see http://www.ssa.gov/retire2/whileworking.htm or contact them directly by phone, email or stopping by your local social security office.

    This answer is provided as general information only and provided by Master’s students pursuing a degree in Personal Financial Planning at Texas Tech University. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or Certified Financial PlannerTM as to your unique financial situation.

  • Login to rate this answer:   Answered on 4/10/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.