How working after retirement affects Social Security
By Hook Law Center
The SSA considers earnings to consist of the income earned from your job or your net income from self-employment. Earnings also include bonuses, commissions and vacation pay because they are relevant to employment. But pensions, investments and other retirement income are excluded.
If you are employed after you have attained full retirement age, your Social Security benefits can increase. The calculation of your Social Security benefits is based on the 35 years in which you earned the greatest amount of income. If your earnings past full retirement age replaces one of those 35 years, then the SSA will recalculate your benefits, and you could receive increased monthly benefits.
However, if you collect Social Security benefits prior to reaching full retirement age, and you keep working, then your benefits could be lowered. If you are under full retirement age for the whole year, the SSA will reduce your benefit payments by $1 for every $2 you earn in excess of the annual limit. In 2014, that limit was $15,480, and in 2015, it was $15,720.
In the year in which you attain full retirement age, the SSA reduces your benefits by $1 for every $3 you earn in excess of a different limit. In 2014, your earnings were limited to $41,400, but only the earnings prior to the month in which you reached full retirement age were counted. In 2015, your earnings were limited to $41,880.