Imagine being a retiree who relies on their Social Security income every month, but it’s not enough to get by. So, they pick up a part-time gig and earn about $23,500 a year. That’s safely under the limit of $24,480. But the minute their employer offers them extra hours during a busy week, and that extra $2,000 to their annual earnings, it suddenly impacts their Social Security income. The reduction in monthly income can be unexpected.
It sounds almost unbelievable, but for many retirees working part-time before reaching full retirement age, this isn’t just a story. The Social Security Administration (SSA) applies something called the earnings test, and it can quietly reduce your monthly benefits if you earn too much. What catches people off guard is how quickly you can cross that limit, sometimes with just a temporary spike in income. If you’re working while collecting benefits, here’s what you need to know.
