How Work Affects 

Your Benefits

2012
How Work Affects 

Your Benefits

You can get Social Security retirement 

or survivors benefits and work at 

the same time. But, if you are younger 

than full retirement age and earn more 

than certain amounts, your benefits 

will be reduced. It is important to note, 

though, that these benefit reductions 

are not truly lost. Your benefit will be 

increased at your full retirement age 

to account for benefits withheld due to 

earlier earnings. (Spouses and survivors 

who receive benefits because they have 

minor or disabled children in their care 

do not receive increased benefits at full 

retirement age if benefits were withheld 

because of work.)

NOTE: Different rules apply if you 

receive Social Security disability benefits 

or Supplemental Security Income 

payments. Then you must report all 

earnings to Social Security. Also, different 

rules apply if you work outside the United 

States. Contact us if you are working (or 

plan to work) outside the country.
How much can you earn 

and still get benefits?

If you were born January 2, 1943, 

through January 1, 1955, then your full 

retirement age for retirement insurance 

benefits is 66. If you work and are full 

retirement age or older, you may keep 

all of your benefits, no matter how 

much you earn. If you are younger than 

full retirement age, there is a limit to 

how much you can earn and still receive 

full Social Security benefits. If you are 

younger than full retirement age during 

all of 2012, we must deduct $1 from 

your benefits for each $2 you earned 

above $14,640.

If you reach full retirement age 

during 2012, we must deduct $1 from 

your benefits for each $3 you earn above 

$38,880 until the month you reach full 

retirement age.

These examples show how 

the rules would affect you:

Let us say that you file for Social 

Security benefits at age 62 in January 

2012 and your payment will be $600 

per month ($7,200 for the year). During 

2012, you plan to work and earn 

$20,800 ($6,160 above the $14,640 

limit). We would withhold $3,080 of 

your Social Security benefits ($1 for 

every $2 you earn over the limit). To 

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do this, we would withhold all benefit 

payments from January 2012 to June 

2012. Beginning in July 2012, you 

would receive your $600 benefit and 

this amount would be paid to you each 

month for the remainder of the year. 

In 2013, we will pay you the additional 

$520 we withheld in June 2012.

Or, let us say you were not yet full 

retirement age at the beginning of the 

year, but reach it in November 2012. 

You earned $39,960 in the 10 months 

from January through October. During 

this period, we would withhold $360 

($1 for every $3 you earn above the 

$38,880 limit). To do this, we would 

withhold your first check of the year. 

Beginning in February 2012, you 

will receive your $600 benefit, and 

this amount will be paid to you each 

month for the remainder of the year. 

We would pay you the remaining 

$240 dollars in January 2013.

Your earnings and your benefits– 

how much will you get?

The following table gives you an idea 

of how much you will receive in Social 

Security benefits for the year 2012, 

based on your monthly benefits and 

estimated earnings.

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For people younger than full retirement 

age during the whole year

If your monthly

Social Security 

benefit is

And you earn

You will 

receive yearly 

benefits of

$700 $14,640 or less $8,400

$700 $15,000 $8,220

$700 $20,000 $5,720

$900 $14,640 or less $10,800 

$900 $15,000 $10,620

$900 $20,000 $8,120

$1,100 $14,640 or less $13,200 

$1,100 $15,000 $13,020

$1,100 $20,000 $10,520

What income counts...

and when do we count it?

If you work for someone else, only 

your wages count toward Social 

Security’s earnings limits. If you are 

self-employed, we count only your net 

earnings from self-employment. We 

do not count income such as other 

government benefits, investment 

earnings, interest, pensions, annuities, 

and capital gains. However, we do count 

an employee’s contribution to a pension 

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(over) 6

or retirement plan if the contribution 

amount is included in the employee’s 

gross wages.

If you work for wages, income counts 

when it is earned, not when it is paid. If 

you have income that you earned in one 

year, but the payment was made in the 

following year, it should not be counted 

as earnings for the year you receive it. 

Some examples are accumulated sick or 

vacation pay and bonuses.

If you are self-employed, income 

counts when you receive it—not 

when you earn it—unless it is paid 

in a year after you become entitled 

to Social Security and earned 

before you became entitled.

Special rule for the first 

year you retire

Sometimes people who retire in midyear already have earned more than the 

yearly earnings limit. That is why there 

is a special rule that applies to earnings 

for one year, usually the first year of 

retirement. Under this rule, you can 

get a full Social Security check for any 

whole month you are retired, regardless 

of your yearly earnings.

In 2012, a person under full retirement 

age for the entire year is considered 

retired if monthly earnings are $1,220 
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or less. For example, John Smith retires 

at age 62 on October 30, 2012. He will 

make $45,000 through October. 

He takes a part-time job beginning 

in November earning $500 per month. 

Although his earnings for the year 

substantially exceed the 2012 annual 

limit ($14,640), he will receive a Social 

Security payment for November and 

December. This is because his earnings 

in those months are $1,220 or less, the 

monthly limit for people younger than 

full retirement age. If Mr. Smith earns 

more than $1,220 in either of those 

months (November or December), he 

will not receive a benefit for that month. 

Beginning in 2013, only the yearly 

limits will apply to him. 

Also, if you are self-employed, we 

consider how much work you do in your 

business to determine whether you are 

retired. One way is by looking at the 

amount of time that you spend working. 

In general, if you work more than 45 

hours a month in self-employment, you 

are not retired; if you work less than 15 

hours a month, you are retired. If you 

work between 15 and 45 hours a month, 

you will not be considered retired if it is 

in a job that requires a lot of skill or you 

are managing a sizable business.

Should you report changes 

in your earnings?

We adjust the amount of your Social 

Security benefits in 2012 based on what 

you told us you would earn this year. If 
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you think your earnings for 2012 will be 

different than what you originally told 

us, let us know right away. 

If other family members get benefits 

based on your work, your earnings after 

you start getting retirement benefits 

could reduce their benefits, too. However, 

if your spouse and children get benefits 

as family members, their earnings affect 

only their own benefits. 

If you need help in figuring your 

earnings, contact us. When you call, 

have your Social Security number handy.

Will you receive higher monthly 

benefits later if benefits are 

withheld because of work?

Yes. If some of your retirement 

benefits are withheld because of your 

earnings, your benefits will be increased 

starting at your full retirement age 

to take into account those months in 

which benefits were withheld. 

As an example, let us say you claim 

retirement benefits upon turning 62 

in 2012 and your payment is $750 per 

month. Then, you return to work and 

have 12 months of benefits withheld. 

We would recalculate your benefit at 

your full retirement age of 66 and pay 

you $800 a month (in today’s dollars). 

Or, maybe you earn so much between 

the ages of 62 and 66 that all benefits 

in those years are withheld. In that 

case, we would pay you $1,000 a month 

starting at age 66.
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Are there other ways that work 

can increase your benefits?

Yes. Each year we review the records 

for all Social Security recipients who 

work. If your latest year of earnings 

turns out to be one of your highest 

years, we refigure your benefit and 

pay you any increase due. This is an 

automatic process and benefits are paid 

in December of the following year. For 

example, in December 2012, you should 

get an increase for your 2011 earnings if 

those earnings raised your benefit. 

The increase would be retroactive to 

January 2012.

Contacting Social Security

For more information and to find 

copies of our publications, visit our 

website at www.socialsecurity.gov or 

call toll-free, 1-800-772-1213 (for the 

deaf or hard of hearing, call our TTY 

number, 1-800-325-0778). We treat all 

calls confidentially. We can answer 

specific questions from 7 a.m. to 7 p.m., 

Monday through Friday. Generally, 

you’ll have a shorter wait time if you 

call during the week after Tuesday. We 

can provide information by automated 

phone service 24 hours a day.

We also want to make sure you 

receive accurate and courteous service. 

That is why we have a second Social 

Security representative monitor some 

telephone calls.
Social Security Administration

SSA Publication No. 05-10069

ICN 467005

Unit of Issue - HD (one hundred)

March 2012 (Recycle prior editions)

Printed on recycled paper