Social Security Limits
The social security limits by earnings
For clients under full retirement age, $1 in benefits will be deducted
for each $2 in earnings above the annual limit ($13,560 for 2008, indexed
for inflation each year).
- In the year they reach full retirement age, benefits will be reduced
$1 for every $3 over a different annual limit ($36,120 for 2008, indexed
for inflation each year) until the month of full retirement age. Then the
earnings will no longer affect the amount of monthly benefits, no matter
how much they earn.
In other words, there are no social security limits on eranings once you
pass full retirement age--you could earn $1 million annually and still collect
full social security benefits.
Social Security Limits on Benefits by Age
No matter what
your full retirement age is, you may start receiving benefits as early
as age 62. But there are social security limits and reductions if you start
benefits prior to full retirement age as shown below.
| Note: If
you were born on January 1st of any year you should refer to the previous
year in the chart below. |
Year
of Birth |
Full
Retirement Age |
Age
62 Reduction Months |
Monthly
% Reduction |
Total
% Reduction |
Monthly
% Reduction (spouse) |
Total
% Reduction (spouse) |
1937
or earlier |
65 |
36 |
.555 |
20.00 |
.694 |
62.50 |
1938 |
65
and 2 months |
38 |
.548 |
20.83 |
.679 |
62.92 |
1939 |
65
and 4 months |
40 |
.541 |
21.67 |
.667 |
63.34 |
1940 |
65
and 6 months |
42 |
.535 |
22.50 |
.655 |
63.75 |
1941 |
65
and 8 months |
44 |
.530 |
23.33 |
.644 |
64.17 |
1942 |
65
and 10 months |
46 |
.525 |
24.17 |
.634 |
64.58 |
1943-1954 |
66 |
48 |
.520 |
25.00 |
.625 |
65.00 |
1955 |
66
and 2 months |
50 |
.516 |
25.84 |
.617 |
65.42 |
1956 |
66
and 4 months |
52 |
.512 |
26.66 |
.609 |
65.84 |
1957 |
66
and 6 months |
54 |
.509 |
27.50 |
.602 |
66.25 |
1958 |
66
and 8 months |
56 |
.505 |
28.33 |
.595 |
66.67 |
1959 |
66
and 10 months |
58 |
.502 |
29.17 |
.589 |
67.08 |
1960
and later |
67 |
60 |
.500 |
30.00 |
.583 |
67.50 |
- Monthly and total percentage r eductions are approximate
due to rounding. The actual reductions for the worker are .555 or
5/9 of 1% per month for the first 36 months and .416 or 5/12 of 1%
for subsequent months.
- The maximum spouses benefit is 50% of the benefit
the worker would receive at full retirement age. The monthly % reduction
for the spouse does not include that automatic 50% reduction. Percentage
reductions are approximate due to rounding.
|
Social Security Limits on Benefits by Earnings while working
If you earned the maximum amount of social security taxable eranings for
the 35 years prior to retirement, the maximum benefit you could receive in
2008 is $2185 per month (at full retirement age). Use the table above to
reduce this for those who start benefits prior to full retirement age..
Summary
Knowing how to manage your finances, even your social security decisions,
is a challenge. You can find other related information in our blog Retirement
Income.
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