You Can Earn Income without Losing Benefits

Updated July 10, 2020 | Infoplease Staff

If you are 70 or over you can earn any amount and still get all your benefits. If you are under 70, you can receive all benefits if your earnings do not exceed the annual exempt amount. The annual amount for 1997 is $13,500 for people 65 or over and $8,640 for people under 65.

If your earnings go over the annual amount, $1 in benefits is withheld for each $2 ($3 if age 65–69) of earnings above the limit. In 1996, Congress enacted legislation that will incrementally increase the annual exempt amount for beneficiaries age 65–69 to $30,000 in the year 2002. The legislated exempt amounts are as follows: $12,500 in 1996, $13,500 in 1997, $14,500 in 1998, $15,500 in 1999, $17,000 in 2000, $25,000 in 2001, and $30,000 in 2002. The annual exempt amount for beneficiaries under age 65 will increase in future years in accordance with increases in average wages.

Beneficiaries under age 70 who earn more than the annual exempt amount and receive some benefits during the year are required by law to report their earnings to the Social Security Administration. For years 1996 and later, SSA will accept the information reported on the form W-2 and the self-employment tax return to be the annual report required by law. This change was made to provide better service and reduce the reporting burden on the public. Beneficiaries will only need to report directly to the SSA if the information on those reports is not correct for purposes of the earnings test. If you continue to work after you have applied for Social Security, your additional earnings may increase the amount of your monthly payment. This will be done automatically by the Social Security Administration. You need not ask for it.