| How the earnings test works |
The retirement earnings test applies only to
people below normal retirement
age (NRA), which ranges from age 65 to 67 depending on year of
birth. Social Security withholds benefits if your earnings exceed
a certain level, called a retirement earnings test exempt amount,
and if you are under your NRA.
One of two different exempt amounts apply, depending on the year
you attain your NRA. These exempt amounts generally increase annually
with increases in the national average
wage index. |
| Determination of Exempt Amounts
for 2005 |
We determine the exempt amounts using procedures
defined in the Social Security Act. For people attaining NRA
after 2005, the annual exempt amount in 2005 is
$12,000. For people attaining
NRA in 2005, the annual exempt amount is
$31,800.
This higher exempt amount applies only to earnings made in months prior to
the month of NRA attainment. |
| Benefits Withheld When Earnings
Exceed Exempt Amounts |
We withhold $1 in
benefits for every $2 of earnings in excess of the lower exempt
amount. We withhold $1 in benefits for every $3 of earnings in excess
of the higher exempt amount. Earnings in or after the month you reach
NRA do not count toward the retirement test. |
| Table of Exempt
Amounts |
Annual Retirement Earnings Test Exempt
Amounts
|
| Year |
Lower amount 1 |
Higher amount 2 |
| 2000 |
$10,080 |
$17,000 |
| 2001 |
10,680 |
25,000 |
| 2002 |
11,280 |
30,000 |
| 2003 |
11,520 |
30,720 |
| 2004 |
11,640 |
31,080 |
| 2005 |
12,000 |
31,800 |
| 1 Applies in years before
the year of attaining NRA. |
| 2 Applies in the year of attaining NRA,
for months prior to such attainment. |
From 1983-1999 the higher exempt amounts applied at ages 65 through 69,
as shown in our historical series of exempt
amounts. |
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www.socialsecurity.gov
