How Much Can I Make In 2018 And Still Draw Social Security
This commodity was updated on March six, 2022, and was originally published on October 22, 2022.
Can you work and collect Social Security at the aforementioned time? The short reply is "yes, information technology'due south possible," but it depends on your age and how much you earn.
The Social Security earnings exam sets annual earnings thresholds, above which certain workers' retirement benefits can exist reduced or completely withheld. Hither's what you lot demand to know about the earnings exam -- and if it could affect you in 2022 or 2022.
Paradigm source: Getty Images.
What is the Social Security earnings test?
In a nutshell, the Social Security earnings examination sets limits to the amount of money individuals who accept non yet reached full retirement historic period tin earn while simultaneously collecting a Social Security retirement benefit.
If a beneficiary earns more than the earnings test threshold for their age, their Social Security benefits can exist reduced or fifty-fifty eliminated.
For the purposes of the Social Security earnings examination, American seniors are grouped into three categories:
- The offset category includes seniors who have reached the eligibility historic period (62) for Social Security retirement benefits, merely who will achieve full retirement historic period afterwards the electric current calendar yr. This group is field of study to the most restrictive earnings test limits.
- The 2nd category includes seniors who take not yet reached full retirement age but will exercise so during the electric current year. This group faces a less restrictive earnings test in the months prior to their altogether month.
- The tertiary category includes seniors who have already reached full retirement age. The earnings test does not apply to this grouping -- that is, seniors who have reached full retirement age can earn every bit much equally possible with no effect on their Social Security benefits.
The 2022 and 2022 earnings test limits
If you fall into the first category -- that is, you won't accomplish full retirement historic period until later on the current year -- you face the stricter grade of the earnings test. Specifically, your start $16,920 of 2022 earnings and $17,040 of 2022 earnings are exempt, pregnant that they have no effect on your benefits. On a monthly basis, this translates to $ane,410 (in 2022) and $1,420 (in 2022). Beyond these thresholds, every $two in excess earnings will reduce your benefits past $1.
If you're in the 2nd category, the exempt earnings amounts are far more generous. In 2022, your first $44,880 in earnings ($3,740 per calendar month) is exempt, and in 2022, this exemption rises to $45,360 ($iii,780 per calendar month). For every $3 in earnings above the corresponding threshold, your retirement benefits volition be reduced past $ane. Only the months before the month you'll reach full retirement historic period are considered.
Here's a chart for quick reference:
| Category | 2017 Exempt Amount | 2018 Exempt Amount |
|---|---|---|
| If you'll be under full retirement age for the entire twelvemonth | $sixteen,920 ($1,410 per month) | $17,040 ($i,420 per month) |
| If you'll reach full retirement age after in the yr | $44,880 ($3,740 per month) | $45,360 ($3,780 per month) |
| If you've already reached full retirement age | No earnings test | No earnings test |
Data source: Social Security Administration. Tabular array by author.
What information technology could hateful for your benefits
Hither's a quick example of how this works. Allow'southward say that you're 64 years sometime and are entitled to a Social Security benefit of $i,200 per month in 2022. Yous piece of work part-fourth dimension and earn $24,000 per year, or $2,000 per month.
Since $2,000 is $590 more than than the earnings test threshold, your monthly Social Security checks will exist reduced by half of this excess, or $295. Instead of receiving a $one,200 monthly do good, you'll get $905.
If your benefits are reduced, they aren't necessarily "lost"
Equally a terminal point, it's important to mention that if your benefits are reduced because of the earnings test, they don't exactly disappear. Rather, the withheld corporeality volition be applied every bit a delayed retirement credit, which can permanently increase your retirement benefit once y'all attain full retirement age.
Of course, in that location's no guarantee that yous'll live long enough to recoup the withheld amount. All the same, the point is that your benefits aren't necessarily lost because of the earnings test -- just delayed.
Source: https://www.fool.com/retirement/2017/10/22/here-are-the-2017-and-2018-social-security-earning.aspx#:~:text=In%202017%2C%20your%20first%20%2444%2C880,will%20be%20reduced%20by%20%241.
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