Social Security Report

Q & A

I want to work while receiving Social Security benefits. Will I be penalized?

Complete Question: I am currently getting Social Security benefits, but they aren’t enough to pay the bills so I want to get a part time job. However, I’ve heard that if I work, my benefits could be reduced. Is this true?

Answer: As with many Social Security issues, the answer is, “it depends”. Your benefits could be reduced if (1) you are not yet full retirement age (FRA); and (2) if you make over a certain amount determined by the Social Security Administration. This is called the Annual Earnings Test (AET). For example: If you will be full retirement age in March, 2015, then in 2014 your benefits will only be reduced if you make more than $15,480. If you do, then your benefits will be reduced by $1 for every $2 over this amount (i.e. if you make $20,000 in 2014, your benefits will be reduced by $2,260. Calculated: $20,000 - $15,480 = $4,520/2 = $2,260). However, the year you turn FRA, this limit goes up to $41,400 and your benefits will be reduced by $1 for every $3 over the limit. So if you make $20,000 in 2015, you will not have a reduction in benefits. If you make $50,000, you will have a reduction of $2,866.67 ($50,000 - $41,400 = $8,600/3 = $2,866.67). Then in 2016 (the first full year you are full retirement age), there is no earnings limit. No matter how much you make, you will not have a benefit reduction. (PLEASE NOTE: These limits are 2014 figures and subject to change for 2015 as set by the Social Security Administration)

Notice: If you have a specific question about your AET, or any other Social Security question, please send it to us and we will be happy to help. Please do not provide personal identification information, such as social security numbers. 

This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.