The increasing cost of living and inflation are making it really difficult for seniors to make ends meet. Social Security benefits may not be enough to get by if you have no other sources of income, savings accounts, or investments.
That is the reason why many retirees need to go back to work while they are on Social Security benefits. But this could reduce your payment amount if you have earnings over the limit and have not reached the Full Retirement Age yet.
What Social Security counts as earnings
According to the Social Security Administration, they count only the wages you receive from the job you have. Of course, if you are self-employed, SSA will count your net earnings.
What is more, the Agency includes any vacation pay, bonuses or commissions. Therefore, it is important to include all your wages, or net earnings, and the aforementioned things to work out the amount of your reduction using a Retirement Earnings Test Calculator.
Even if you may get a reduction when you exceed the earnings limits and you have not reached Full Retirement Age, your Social Security benefits may increase as a result of the work you are doing and the taxes you are paying.
What Social Security does not count as earnings
By now, we have learned that SSA takes into account wages, net earnings, commissions, bonuses, and vacation pay to see if you exceed the limits while you are on benefits and working at the same time.
However, the Social Security Administration will not count as 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.