Social Security

That depends on your year of birth. If you were born before 1943, the SSA considers full retirement age to be 65, and the earned income cap is lifted the month of your birthday.

If you were born between 1943 and 1954, you will reach full retirement age at 66. In the year prior to your 66th birthday, the Annual Income Test remains at $14,160, with a benefit reduction of $1.00 for every $2.00 you earn over the limit. Your social security check will be withheld beginning in January of the next year until the entire overage is offset.

If you retire this year, special rules apply to prevent retirees from being penalized for high income earned prior to their retirement date. Nothing you earn before filing for retirement will be counted toward the limit; however, you cannot earn more than $1,180 in each of the months following retirement the first year without incurring a penalty.

In the year you reach full retirement age, you can earn $37,680 annually, but for every $3.00 over the limit, $1.00 is withheld from your benefits until the month your reach full retirement age.

The income cap is lifted completely and permanently the month you reach full retirement age.

Retirement and Earned Income Summary

Retirement year

• No penalty for income earned before retirement
• Can earn $1,180 per month for remainder of first year, if taking early retirement
• Can earn $37,680 per year until birth month if you reach full retirement age during your retirement year
• No income cap and no penalty if you have already reached full retirement age

Age 62

• Apply the first-year rule if retiring at 62

Age 63

• Apply the first-year rule if retiring at 63;
• Otherwise, $14,160 per year earned income cap

Age 64

• Apply the first-year rule if retiring at 64;
• Otherwise, $14,160 per year earned income cap

Age 65

• If born before 1943, no income limit
• If born between 1943 and 1954, apply first-year rule if retiring at 65
• Otherwise, $14,160 per year earned income cap

Age 66

• If born before 1943, no income limit
• If born between 1943 and 1954, income cap of $37,680 until birth month
• No income limit after birth month

Age 67

• If born before 1955, no income limit
• Age 67 will gradually be phased in as full retirement age for people born in 1955 or later

Age 68 and older

• No income limit

This used to be simple but not anymore. The important words are Full Retirement Age. Today, Full Retirement Age increases gradually for people born after 1938. If you are just now 65 then you were born in about 1950. If You Were Born Between 1943 And 1954 your Full Retirement Age is 66. So the following rules apply to you:

o If you will not be 66 until sometime in 2016 they deduct $1 from your benefit payments for every $2 you earn above $15,720. That is, you can earn $15,720 with no penalty. If you make more than $15,720 your benefit will be reduced by one dollar for every two dollars you earn about that amount.

o If you reach 66 in 2015, they deduct $1 in benefits for every $3 you earn above $41,880. But, only your earnings beforethe month you reach 66 are counted. Meaning you can earn $41,880 before the month you become 66 with no penalty. Starting with the month you reach 66, you will get full benefits with no limit on your earnings.

Just to make it more confusing, these limits may change in 2016.

For 2016, the limit is $15,720. (The amount goes up each year.)

These things don't count towards the limit:

• Pensions
• Annuities
• Investment Income
• Interest
• Government or Military retirement benefits

Earnings from current work count toward the reduction.

If you are collecting Social Security retirement benefits before full retirement age (for the full year), than anything over this amount will result in your Social Security payments being reduced by $1 for every $2 earned.

Example: You earned $16,720. That's $1,000 over the allowed limit. $1,000/2=$500. Your benefit will be reduced by $500 for the year.

The limit is higher during the year that you reach retirement age, and then, starting the month you reach full retirement age, you will receive full benefits with no limit on your earnings.

Here is something obscure that very few know:

There is a special rule that applies only in the year you turn Full or Normal Retirement Age (FRA or NRA). In that year only, the exemption amount that you are allowed to earn before work reductions is $41,880. (This is the 2016 number as it increases for inflation most every year.) If you earn over that amount, benefits are reduced one dollar for every three over that amount.

But the amount is pro-rated based on your birth date. (Exemption Amount = 12 divided by the number of full months that you will be younger than full retirement age times $41,880).

For those born in January or on February 1, full benefits are available for the whole year. Most people will collect full benefits if started in January while they are still age 65. In reality, the $41,880 applies only to those born in December.

This is important to know in advance because SSA will not give retroactive benefits for months that you are under age 66. You must call them by the end of January to protect these extra months!

· There are actually two answers to this question. A worker can begin to collect Social Security benefits as early as age 62, but cannot begin to receive full retirement benefits until between 65 and 67. The exact age for full benefits depends on date of birth. Workers born before 1938 can receive full retirement benefits starting at age 65. The full retirement age climbs by two months per year for workers born between 1938 and 1942, and is 66 for those born between 1943 and 1954. The full benefits age then climbs by two months per year for those born between 1955 and 1959, and will be 67 for anyone born in 1960 or after.

If a worker decides to receive benefits starting when he or she is 62, then monthly benefits will be reduced by a set percentage for each month that the worker begins to receive benefits before his or her full retirement age. As the full retirement age climbs from 65 to 67, workers who retire early will receive an even greater reduction in their monthly benefits. Currently, if a worker retires at 62, he or she receives 80 percent of the full retirement age amount. This will eventually drop to 70 percent if a persons full retirement age is 67.

Benefits also increase for every month that a worker begins to receive retirement benefits after he or she reaches full retirement benefits age. This growth continues until age 70. · Qualifying for Retirement Benefits

Everyone is not qualified to receive Social Security benefits. In order to qualify, one has to earn at least 40 quarterly credits. Workers receive one credit by earning at least $870 in a three-month period and paying Social Security taxes on that amount. Workers who earn $3,480 during a year receive 4 credits. The amount of income required to earn a credit changes annually, but this does not affect credits that have already been earned. Once a worker has earned the required 40 credits, he or she is permanently qualified. However, the level of benefits that a worker actually receives depends on his or her income history.

There are similar requirements for the Disability Insurance program, but the number of credits necessary to qualify varies depending on the age at which one becomes disabled.

No. Social Security Administration doesn't use W-2 forms. The form they use is called SSA-1099, which is a Social Security Benefit Statement. It's issued by the Social Security Administration. It reports the total amount of benefits that the recipient received in the previous year.

To get a replacement SSA-1099 if yours hasn't come in the mail, you can visit or call your local Social Security office, or use your online "My Social Security" account (you will have to register if you haven't already).