Expert's View

Quite a few of you retired at the end of 2017. And some of you are already working at another job to supplement your annuity. If you are one of them, congratulations! Although I don’t want to rain on your parade, I do need to let you know about a provision in law that affects how much you can earn through wages or self-employment and still receive a Social Security benefit. The rules vary depending on your age.

If you are under full retirement age – which ranges from 65 to 67, depending on your year of birth – currently it’s 66 – your Social Security benefit will be reduced by $1 for every $2 you earn over the limit, which is $17,040 in 2018. In the year that you reach your full retirement age, it will be reduced by $1 for every $3 you earn above a different limit, $45,360 in 2018, until you reach that age. There won’t be any limit on your earnings beginning with the month in which you reach full retirement age.


FERS retirees

If you are a FERS employee who is receiving the special retirement supplement, that benefit is payable from the date you retire until age 62. It approximates the amount of Social Security benefit you earned while a FERS employee. However, because it is treated the same as a Social Security benefit, it can be reduced or eliminated if you exceed the earnings limit.

FYI. If you retire mid-year, and have earned more than the Social Security earnings limit, there’s a special first-year rule covering that. You can receive an unreduced SRS payment for any whole month you are retired regardless of your earnings in that calendar year.

CSRS retirees

The rules are identical for CSRS employees who retire and are eligible for a Social Security benefit. However, that benefit will also be affected by the windfall elimination provision, which reduces the Social Security benefit of anyone who has fewer than 30 years of substantial earnings under Social Security. But that’s a topic for another time.

Social Security earnings limit

Because some of you received substantial lump-sum payments for your unused annual leave, you may be wondering if that money will count against the annual limit. The answer is no. The Social Security earnings limit only applies to earnings from wages and self-employment.