How Much Money Can I Make & Not Have to Pay Back SS?

by Meryl Baer ; Updated July 27, 2017
Although Social Security  benefits can begin at 62, more senior citizens continue working to full retirement age and beyond.

Retirement conjures up all kinds of images. Traveling the world. Sitting in a hammock reading. Enjoying the grandchildren. Volunteering at a favorite charity. Working part-time…or maybe full-time. The numbers of 60- and 70-plus-year-olds continuing to work is growing. Their wages impact the time to start collecting Social Security benefits and whether or not reduced benefits are received.

Earnings Prior to Full Retirement Age

The amount of money earned before Social Security benefits are affected depends on whether an individual is below or above full retirement age. Individuals born between January 2, 1943 and January 1, 1955 reach full retirement age at 66. The earliest age anyone can receive Social Security retirement benefits is 62. Workers below full retirement age and receiving benefits can earn $14,160 in 2011 with no reduction in Social Security payments. An individual can earn as much as $37,680 the year full retirement age is reached. There is no maximum earnings amount at full retirement age.

Reduced Benefits

Many workers below full retirement age will earn more than $14,160 in 2011 and collect Social Security. These individuals will lose $1 in benefits for every $2 earned above the $14,160 limit. There is a $1 deduction in benefits for every $3 earned above the annual limit that applies only to the year in which full retirement is reached. The same reduced benefit rules apply to children or a spouse who works while receiving benefits.

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First-Year Retirement Rule

Sometimes a person retires in the middle of the year. Employment checks cease and Social Security payments begin. The person’s annual earnings may be above the annual limit. A special earnings rule applicable to first-year retirees only allows the individual to receive full monthly Social Security checks during the transition year. If the person continues working and wants to begin Social Security payments, monthly earnings above $1,180 will negate payments. Benefits would begin again the following calendar year.

Rules for the Self-Employed

The Social Security Administration sets limits on the hours a self-employed person can work and remain eligible for benefits. A person working more than 45 hours a month is not retired according to SSA guidelines. An individual working less than 15 hours a month is considered retired. An individual is not retired if working between 15 and 45 hours a month in a job requiring a lot of skill or managing a business.

Lost Benefits Found Later

The SSA does not consider benefit reductions while working and receiving Social Security as money lost forever. An individual’s benefits will be adjusted and increased at full retirement age to reflect the benefits withheld in prior years. This rule applies to the wage earner only; it does not affect spouses or survivors receiving benefits.

About the Author

Meryl Baer worked at a financial firm for 15 years, researching investments and writing newsletters and marketing materials. She also worked at two business schools as an English/business writing instructor, department head and placement director. Baer holds a master's degree in American studies from Pennsylvania State University and a master's degree in business administration from Robert Morris University.

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