What Is the Social Security Earnings Test?
Knowledgeable financial advisor Darcy Bergen has presided over the Bergen Financial Group since 2003. In this role, Darcy Bergen also hosts educational workshops to improve financial awareness amongst seniors on topics relevant to retirement planning, including the Social Security earnings test.
While Social Security recipients have the option to earn income, the government places thresholds on how much a recipient can earn before Social Security payments are lowered. Income generated from capital gains, investments, pensions, and other passive vehicles do not count towards these thresholds.
These thresholds differ depending on the recipient’s age. Recipients under the full retirement age of 66 can earn up to $17,640 annually before their benefits are reduced. Recipients reaching the retirement age within the tax year can earn up to $46,920 in the months preceding their birthday before being subjected to reductions. The Social Security earnings test doesn’t apply to recipients above the full retirement age.
While Social Security recipients have the option to earn income, the government places thresholds on how much a recipient can earn before Social Security payments are lowered. Income generated from capital gains, investments, pensions, and other passive vehicles do not count towards these thresholds.
These thresholds differ depending on the recipient’s age. Recipients under the full retirement age of 66 can earn up to $17,640 annually before their benefits are reduced. Recipients reaching the retirement age within the tax year can earn up to $46,920 in the months preceding their birthday before being subjected to reductions. The Social Security earnings test doesn’t apply to recipients above the full retirement age.
