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 benefits. However, if you earn more than the limit and have not yet reached the Full Retirement Age, your payment amount may be reduced.
What Social Security counts as earnings
The Social Security Administration counts only the wages you receive from your current job. Of course, if you are self-employed, the SSA will consider your net earnings.
Additionally, the Agency includes any vacation pay, bonuses, or commissions. As a result, when using a Retirement Earnings Test Calculator to calculate the amount of your reduction, you must include all of your wages, or net earnings, as well as the aforementioned factors.
Even if you exceed the earnings limits and have not reached full retirement age, your Social Security benefits may increase as a result of your work and taxes.
What Social Security does not count as earnings
We’ve already learned that the Social Security Administration considers wages, net earnings, commissions, bonuses, and vacation pay when determining whether you exceed the limits 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 information, if you are under Full Retirement Age and you are receiving Social Security benefits, you should report any changes in earnings. Perhaps you expected to receive a specific amount but it turned out to be higher o smaller. To do so call SSA at 1-800-772-1213 (TTY 1-800-325-0778), 8:00 a.m. – 7:00 p.m., Monday through Friday.