About Social Security Income Limits

by Sam Ashe-Edmunds, studioD

If you are ready to receive Social Security benefits or are interested in starting your benefits early, you should know that earning income while you receive benefits can affect the amount of benefits you can receive -- at least, until you reach full retirement age.

Retirement Age

Income limits are based on your age when you begin receiving Social Security benefits. The Social Security Administration defines full retirement age as 66 years or older for people born between 1943 and 1954. For those born between 1954 and 1960, the retirement age is 66 plus some number of months, depending on your exact birth year. The full retirement age reaches age 67 for people born in 1960 or later.”

Social Security Statement

Each year, the SSA sends you a document titled, “Your Social Security Statement.” This document tells you whether you have qualified for Social Security benefits and shows you what you have paid into Social Security for each year you have filed taxes. The document shows you what you will receive monthly at your full retirement age if you continue to work at your current earnings level and what you would receive if you work until age 70. It also lists what you will receive if you stop working and begin drawing benefits at age 62. The document also lists amounts for disability, family, survivors and Medicare benefits.

Full Retirement Age

For 2012, those who have reached the full retirement age receive all of their benefits regardless of how much income they earn. If you plan to work after you reach the full retirement age or earn income from investments, you will be able to receive the maximum benefits you have earned. What you receive in pension or other retirement money will not affect your benefits.

Under Full Retirement Age

If you decide to take Social Security benefits before you reach your full retirement age, the amount of income you earn will affect the amount of benefits you receive. Interest, dividends, capital gains and pensions do not count as income. The maximum amount of income you can earn in 2012 without penalty is $14,640, up from $14,160 in 2011. For every $2 you earn over the penalty limit, you will lose $1 in Social Security benefits. For example, if you earn $24,640, you will lose $5,000 in benefits. You will receive the money that is withheld later on when you reach full retirement age.

In the Year You Reach Full Retirement

If you decide to draw benefits during the year you reach full retirement age, you will have income limits until you reach your full retirement age birthday. During that time, your income limit is $38,880, up from $37,680 in 2011. You will lose $1 in benefits for every $3 you earn above the maximum amount. You will receive the money withheld when you reach full retirement age.


If you work while you are disabled and receiving Social Security disability benefits, you lose no benefits during a nine-month trial work period but must report all income to the SSA. After the trial period ends, the SSA will review your situation and determine whether or not to continue disability payments.

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

Photo Credits

  • Jupiterimages/Comstock/Getty Images