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Social Security retirement benefits Examples: When you work and reach full retirement age

If you are under full retirement age and you work and earn above the annual earnings limit we deduct excess earnings from your benefits. However, when you reach full retirement age, we recompute your benefit amount to leave out the months when we withheld benefits for excess earnings.

Let's look at some examples:

  • You begin receiving your Social Security benefits at age 62 in January 2007. At age 62, you are entitled to $800 a month in benefits ($9,600 for the year).

    You work and earn $20,960 ($8,000 over the $12,960 limit) in 2007. Your Social Security benefits would be reduced by $4,000 ($1 for every $2 you earned over the limit), but you would still receive $5,600 of your $9600 in benefits for 2007. ($9,600 - $4,000 = $5,600)

    1. You continue to work and earn more than the limit for the next three years. We continue to withhold benefits for 5 months each year due to excess earnings. In January 2011 we stop withholding benefits because you have reached full retirement age. At this point you will have received about $22,400 in benefits.

      We recompute your benefit amount to leave out the 20 months when we withheld benefits.  Your $800 monthly benefit amount increases to $895. (If you had waited until full retirement age to start your benefits, the monthly benefit amount would have been $1,076.)

    2. You earn $12,000 in the first 6 months of 2008 and then you retire. Your total earnings for 2008 and the next two years are under the limit so we pay benefits for all 36 months. In January 2011 you reach full retirement age. At this point you will have received about $34,400 in benefits.

      We recompute your benefit amount to leave out the 5 months in 2007 when we withheld benefits. Your $800 monthly benefit amount increases to $829. (If you had waited until full retirement age to start your benefits, the monthly benefit amount would have been $1,076.)

  • You are age 65 at the beginning of the year but will reach full retirement age in August 2007. Your benefits are $800 per month ($9,600 for the year).

    You earn $60,000 during the year, with $36,450 of it in the 7 months from January through July.

    Your Social Security benefits would be reduced through July by $670 ($1 for every $3 of the $2,010 you earned above the $34,440 limit). After we deduct $670, you would still receive $4,930 out of your $5,600 in benefits for the first 7 months (January through July). You would get all $4,000 in benefits for the 5 months after you reached full retirement age (August through December).

    Even though you earned $60,000, you would still get $8,930 of your Social Security benefits in 2007.

    In 2008 we recompute your benefit to leave out the month when we deducted excess earnings. Your monthly benefit amount increases to $805 effective August 2007 and you will receive another $25 in benefits for 2007.

If you are eligible for retirement benefits this year and are still working, you can use our earnings test calculator to see how your earnings could affect your benefit payments.

Note: The examples above do not include cost-of-living increases or earnings added to your record after benefits started.

If you continue to work while you are getting benefits, we automatically check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you your new benefit amount.


Social Security Questions and answers
In the news: Read Carols comments in this Social Security article

Thank you so much. The amount of infomation you provided on our call went a long way in helping to resolve the issues I had with the social security rep I was working with.
Tom F. 05-18-2018

Thank you so much. You provide a fantastic service and I really appreciate all your help. The next time I have a question regarding Social Security I will go to you first and save myself a lot of time.
Carol J. 05-06-2018

Thanks for the straight forward answers. It would have save a lot of time if I knew about this site months ago.
Emily D. 04-25-2018

Great talking with you and thanks for the help. Things now seem to be going in the right direction.
Chris H. 04-25-2018

Hello, thank you so much for responding to my inquiry, I really did not expect to get an answer from you so quickly. Brought the information you sent to my social security office an the issue, i have been dealing with for months, was resolved in an hour.
Veda M. 04-05-2018

Thank you so much for the reply.
Tom C. 03-06-2018

Thank you so much for returning my email so quickly.
Laverne J. 02-24-2018

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