How do special payments I got after I retired affect my Social Security retirement benefits?
After you retire, you may get payments for work you did before you started getting Social Security benefits. Some special payments to employees include bonuses, accumulated vacation or sick pay, severance pay, back pay, standby pay, sales commissions and retirement payments. Or, you might get deferred compensation reported on a W-2 form for one year, but earned in a previous year.
See Special Payments After Retirement for more information (including additional types of payments that may qualify).
I had additional earnings after I retired; will my monthly Social Security retirement benefit increase?
Each year we review the records for all working Social Security recipients to see if additional earnings may increase their monthly benefit amounts. If an increase is due, we figure a new benefit amount and pay the increase retroactive to January following the year of earnings.
Must I pay Social Security taxes on my earnings after full retirement age?
Everyone working in covered employment or self-employment regardless of age or eligibility for benefits must pay Social Security taxes. However, there are narrow exceptions to paying Social Security taxes that apply at any age, such as an individual who qualifies for a religious exemption.
For more information & services, please contact us:
Hoang Le Tax, Insurance & Financial Services
404 International Blvd, Oakland CA 94606
Home Page: http://hoangleservices.com
Social Security News: http://blog.hoangleservices.com/social-security-benefits
Office: (510) 433-5047 | Cell: (510) 697-9559
Fax: (510) 779-5588 | Email: [email protected]
What is the special rule about earnings in the first year of retirement?
Sometimes people younger than full retirement age retire in the middle of the year and have already earned more than the yearly earnings limit. There is a special rule that applies to earnings for one year, usually the first year of retirement. Under this rule, you can get a full Social Security benefit for any whole month you are retired, regardless of your yearly earnings.
What happens if I work and get Social Security retirement benefits?
You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
- We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2017 that limit is $16,920.
- In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2017, the limit on your earnings for the months before full retirement age is $44,880.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
What counts as earnings:
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net earnings if you’re self-employed. We include bonuses, commissions, and vacation pay. We don’t count pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits.
Your benefits may increase when you work:
As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings. However, we will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.
If you need to report a change in your earnings after you begin receiving benefits:
If you receive benefits and are under full retirement age and you think your earnings will be different than what you originally told us, let us know right away. You cannot report a change of earnings online.
Hoang Le Tax, Insurance & Financial Services
404 International Blvd, Oakland CA 94606
Office: (510) 433-5047 | Cell: (510) 697-9559
Fax: (510) 779-5588 | Email: [email protected]
Home Page: http://hoangleservices.com
Social Security Articles:http://blog.hoangleservices.com/social-security-benefits