The rising cost of living and inflation have made it extremely difficult for seniors to make ends meet. If you do not have any other sources of income, savings accounts, or investments, your Social Security benefits may be insufficient to cover your expenses.
That is why many retirees need to return to work while receiving Social Security payments. However, if you earn more than the limit and have not yet achieved the Full Retirement Age, your payout amount may be reduced.
What Social Security counts as earnings
The Social Security Administration counts just the money you get from your current job. Of course, if you are self-employed, the SSA will consider your net profits.
Additionally, the Agency includes any vacation pay, incentives, or commissions. As a result, while utilizing a Retirement Earnings Test Calculator to calculate the amount of your reduction, you must consider all of your salaries, or net earnings, as well as the aforementioned factors.
Even if you exceed the earnings restrictions and have not reached full retirement age, your Social Security payments may increase as a result of your employment and taxes.
What Social Security does not count as earnings
We’ve already known that the Social Security Administration considers wages, net profits, commissions, bonuses, and vacation money when determining whether you exceed the restrictions while receiving benefits and working.
However, the Social Security Administration will not consider earnings:
- Pensions
- Annuities
- Investment income
- Interest
- Veteran benefits
- Other government retirement benefits
- Other military retirement benefits
Retirees who need to report a change in earnings to SSA
For your knowledge, if you are under Full Retirement Age and receive Social Security benefits, you must disclose any changes in wages. Perhaps you expected to receive a certain amount but it turned out to be larger or smaller. To do so, call SSA at 1-800-772-1213 (TTY 1-800-325-0778) from 8:00 a.m. to 7:00 p.m., Monday through Friday.