# Question About The Earnings Cap



## Phillip (Jan 6, 2019)

I am suppose to re-apply for my social security again January 8th. I filed in June of last year and Social Security fed me this crap about how I am going to be over the cap by the time I would have gotten my first check. I am 62...

Since I am re-applying in January and plan to stop working the middle of Febuary will I be OK as far as the cap is concerned? I do not understand this cap crap! They say $17,640 then they say $1450 a month...Which is it?


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## ClassicRockr (Jan 6, 2019)

Depending on your birthday, the cap will got away when a person turns between 65 and 67. Age 67 is considered the Full Retirement age when no cap is used. A person can earn as much as they want and also get full SS. My wife has been since turning 67 three years ago. Full-time job and SS as well. 

What SS website says: "If you earn wages before full retirement age, Social Security sets an annual dollar limit and then begins to deduct $1 from your benefit for every $2 you earn over the limit."


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## Phillip (Jan 6, 2019)

ClassicRockr said:


> Depending on your birthday, the cap will got away when a person turns between 65 and 67. Age 67 is considered the Full Retirement age when no cap is used. A person can earn as much as they want and also get full SS. My wife has been since turning 67 three years ago. Full-time job and SS as well.
> 
> What SS website says: "If you earn wages before full retirement age, Social Security sets an annual dollar limit and then begins to deduct $1 from your benefit for every $2 you earn over the limit."



That still don't tell me nothing...$17,640 or $1450? Or both?


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## woody (Jan 6, 2019)

https://www.aarp.org/retirement/social-security/questions-answers/social-security-first-year-rule/


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## Phillip (Jan 6, 2019)

woody said:


> https://www.aarp.org/retirement/social-security/questions-answers/social-security-first-year-rule/



Still no help....$17,640 or $1450?


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## Buckeye (Jan 6, 2019)

afaik, the calendar year that you retire, the monthly $1450 rule applies for the balance of the year.  After that, just the annual ($17,640 but the amount varies based on age..) rule applies.  Yes it's confusing.


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## Smokey613 (Jan 6, 2019)

The explanation I received was they deducted $1 for every $2 dollars earned that was over the cap. What they don't plainly explain is how they deduct the overage. They do not simply withold the overage amount from your monthly benefit in twelve reduced payments. They actually stop all SS payments beginning in January until you have met the estimated overages for the current year, then your normal SS benefits resume.


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## Phillip (Jan 6, 2019)

Hoot N Annie said:


> afaik, the calendar year that you retire, the monthly $1450 rule applies for the balance of the year.  After that, just the annual ($17,640 but the amount varies based on age..) rule applies.  Yes it's confusing.



So I plan to work only 1/2 of  Febuary...But I am working through the entire month of January...I will be $334 over the $1450 for January...So will I be on the monthly bullshit list or the annual bullshit list?


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## Buckeye (Jan 6, 2019)

I'm not qualified to say.  The folks at your local SS office would be the best place for a definitive answer.


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## Phillip (Jan 6, 2019)

Hoot N Annie said:


> I'm not qualified to say.  The folks at your local SS office would be the best place for a definitive answer.



Neither are they....


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## Floridatennisplayer (Jan 6, 2019)

I am confused as well. I am being paid through the end of March. That will be $40,000. Then I am retiring. I will turn 64 in March as well and plan to take SS. So I have the opportunity to do some part time consulting starting in April. I’m guessing $15,000 per year. 

So, how on earth does this work in my situation?


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## Phillip (Jan 7, 2019)

Floridatennisplayer said:


> I am confused as well. I am being paid through the end of March. That will be $40,000. Then I am retiring. I will turn 64 in March as well and plan to take SS. So I have the opportunity to do some part time consulting starting in April. I’m guessing $15,000 per year.
> 
> So, how on earth does this work in my situation?



Good luck..No one knows how this works not even dumbass Social Security.


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## Floridatennisplayer (Jan 7, 2019)

I talked to 2 different people after a 45 minute wait on the phone. The first person was clueless and I swear had the vocabulary of a 9 year old.  Switched me to someone else, an older woman with more experience. 

Here is what she said. If you are going to take SS prior to your full retirement age....if you start anytime after January it doesn’t matter how much you make prior to SS, but the remaining months of the year will be the $1,450 per month.  So if you start collecting in August it doesn’t matter if you have made a zillion dollars prior to August, but for the rest of the year you are capped at the $1,450.


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## Phillip (Jan 8, 2019)

Floridatennisplayer said:


> I talked to 2 different people after a 45 minute wait on the phone. The first person was clueless and I swear had the vocabulary of a 9 year old.  Switched me to someone else, an older woman with more experience.
> 
> Here is what she said. If you are going to take SS prior to your full retirement age....if you start anytime after January it doesn’t matter how much you make prior to SS, but the remaining months of the year will be the $1,450 per month.  So if you start collecting in August it doesn’t matter if you have made a zillion dollars prior to August, but for the rest of the year you are capped at the $1,450.



I bet if you call the dumbasses agian you will get a different answer.


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## mathjak107 (Jan 10, 2019)

the first year has special rules ..  from the month you start collecting you are allowed 1450 a month  or  a cumulative total .

so if you started in july you can earn a max of 8700 plus whatever you made prior which does not count .  next year it is the full 17,400 you are allowed..

i took mine in sept .. i was over 1420  (the limit when i did it )    in sept and   october   by a bit and under 1420 in  nov and dec. there was no give back


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## Phillip (Jan 10, 2019)

mathjak107 said:


> the first year has special rules ..  from the month you start collecting you are allowed 1450 a month  or  a cumulative total .
> 
> so if you started in july you can earn a max of 8700 plus whatever you made prior which does not count .  next year it is the full 17,400 you are allowed..
> 
> i took mine in sept .. i was over 1420  (the limit when i did it )    in sept and   october   by a bit and under 1420 in  nov and dec. there was no give back



Well I finally got my answer....With me filing in January they are using the $17,640 since thats what I am allowed to make for the year. And to anyone considering this; you would do well to file in January to avoid the monthly cap...if your 62. I ran into that problem back in July 2018. I was already half way there and would would have been over the cap by November 2018. So filing in January is your best option if you can wait that long.


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## mathjak107 (Jan 10, 2019)

yes , if you file in january they give you the full  17.640  .. it is very unclear on the website but if you use the calculator it does reflect that ...


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## Olivia (Jan 11, 2019)

From what I understand, even if you go over the required amount and it gets taken away, you will get back that taken away amount when you reach full retirement age, what ever that age might be for you. You don't actually lose anything. And what ever you've earned that gets cut from you now, may even later on get you a higher social security check when that amount gets added to your overall years of earnings.


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## mathjak107 (Jan 12, 2019)

Olivia said:


> From what I understand, even if you go over the required amount and it gets taken away, you will get back that taken away amount when you reach full retirement age, what ever that age might be for you. You don't actually lose anything. And what ever you've earned that gets cut from you now, may even later on get you a higher social security check when that amount gets added to your overall years of earnings.


you don't lose it but the way it is doled back out to you it can take you as much as  17 years to get back .


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## BobF (Jan 12, 2019)

When I retired, some 20 years ago,  I was told to accept a certain number for that year and then the next year would be set to my maximum.   So yes, I did have to do as asked for the first period of months and then thing went good even when I went back to work, SS just keeps on coming.


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## Phillip (Jan 13, 2019)

Olivia said:


> From what I understand, even if you go over the required amount and it gets taken away, you will get back that taken away amount when you reach full retirement age, what ever that age might be for you. You don't actually lose anything. And what ever you've earned that gets cut from you now, may even later on get you a higher social security check when that amount gets added to your overall years of earnings.



Thats true...But once you go over the $17,640 then your limited to just $1470 a month...They then take $1 for every $2 you go over....For example if I applied in July 2018 and if I had left it alone I would have been some $4000 over the annual $17,640...Even if I had stopped working it would have been months before I ever saw a check...They do not do a very good job of explaining this on the SS site and thats whats so confusing, it was for me....


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## mathjak107 (Jan 13, 2019)

prior to filing there is no limitation on earnings .    i made 100k prior to filing 3/4's in to the year  , it is not counted . the clock only starts ticking after you file .  i was limited for  only sept , oct , nov and december  once i filed  . any amount you earned earlier in that year  is not counted .  there are special rules for firsat year and also the year you will be fra .

you can earn up to 45k the year you will be fra up until your birthday when there is no limit .


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## Phillip (Jan 13, 2019)

mathjak107 said:


> prior to filing there is no limitation on earnings .    i made 100k prior to filing 3/4's in to the year  , it is not counted . the clock only starts ticking after you file .  i was limited for  only sept , oct , nov and december  once i filed  . any amount you earned earlier in that year  is not counted .  there are special rules for firsat year and also the year you will be fra .
> 
> you can earn up to 45k the year you will be fra up until your birthday when there is no limit .





> prior to filing there is no limitation on earnings . i made 100k prior to filing 3/4's in to the year , it is not counted .



Guess that depends on who you talk too at the* Social Instability Office*...The office I filed through the first time counted the whole year from January up until I filed the first time in July. They did not discount nothing....they included everything up until I filed then everything after that. Every person you talk to seems to make up their own rules...It's basically a case of the left hand not knowing what the right one is doing.


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## mathjak107 (Jan 13, 2019)

no , it should not matter who you speak  to , if they said that they are wrong 100%....

right on the ss website it clearly explains what happens . ...  see their example .... 

personally i can't see ss getting this wrong . i think it is more a misunderstanding of what they told you . this is basic stuff. .


*Special Earnings Limit Rule*

Some people who retire in mid-year have already earned more than their yearly earnings limit. That is why we have a special rule that applies to earnings for one year, usually the first year of retirement.
The special rule lets us pay a full Social Security check for any whole month we consider you retired, regardless of your yearly earnings. If you will


Be under full retirement age for all of 2018, you are considered retired in any month that your earnings are $1,420 or less and you did not perform substantial services in self employment.
Reach full retirement age in 2018, you are considered retired in any month that your earnings are $3,780 or less and you did not perform substantial services in self-employment.
                            "Substantial services in self-employment" means that you devote more than 45 hours a month to the business or between 15 and 45 hours to a business in a highly skilled occupation.                        
Example: John Smith retires at age 62 on June 30, 2018. He earned $37,000 before he retired.
On October 5th, John starts his own business. He works at least 15 hours a week for the rest of the year and earns an additional $3,000 after expenses. His total earnings for 2018 are $40,000.
Although his earnings for the year substantially exceed the 2018 annual limit ($17,040), John will receive a Social Security payment for July, August and September. This is because he was not self-employed and his earnings in those three months are $1,420 or less per month, the limit for people younger than full retirement age.
John will not receive benefits for October, November or December 2018 because he worked in his business over 45 hours per month in all three months.
Beginning in 2019, the deductions are based solely on John's  annual earnings limit.


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## Phillip (Jan 13, 2019)

mathjak107 said:


> they are wrong 100%



They maybe..But what are you going to do? They got you over a barrel...I was told by a co-worker to file in January to avoid the cap until I retire on March 1...When you have people you work for that are complete assholes and will not work with you then you have to resort to other tactics...Been working for 46 years now, hated every f'ing job I ever had.


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## mathjak107 (Jan 13, 2019)

the filing in january is something very different , which you did not understand and quite frankly i did not either when i first learned about this .

here is the deal  ...  if i file in july under the " special  first year rules " which i posted from their site ,  i can earn as much as i like prior to filing in july ....  i  would be capped at 1450 x the next 6 months or 8700 before giving money back ......

that is a given ..


now here is were the january comes in .

if you file and catch january as your first check they don't count the prior years earnings at all since it is a new year and as such you don't fall under "first years special rules " you go right to the 2nd year rules which just allow you a max of 17,640  with no monthly cap , just yearly . in the end not a big deal .  it really only matters if your first year is the year you will be fra ..

why ?  because if you file in january  you get the full 45k  allowed in the year you will be fra right up until your birthday with no prorating .  so  if you are born in march  you can earn 45k  for january , feb and march and give nothing back . once you are fra there is no limit .  if you filed after january you get prorated up to your birthday at 3750 a month  .

bottom line is earnings prior to filing ARE NEVER COUNTED
That is why there is a special one-year rule that applies to earnings during the first year of retirement. Under this rule, an individual can get a full Social Security check for any whole month he or she is retired, regardless of yearly earnings prior to claiming benefits.


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## Phillip (Jan 13, 2019)

mathjak107 said:


> the filing in january is something very different , which you did not understand and quite frankly i did not either when i first learned about this .
> 
> here is the deal  ...  if i file in july under the " special  first year rules " which i posted from their site ,  i can earn as much as i like prior to filing in july ....  i  would be capped at 1450 x the next 6 months or 8700 before giving money back ......
> 
> ...



The 45K is assuming your going out at FRA...It don't apply if you retire before FRA....


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## mathjak107 (Jan 13, 2019)

Phillip said:


> The 45K is assuming your going out at FRA...It don't apply if you retire before FRA....


Wrong again .. the year you turn fra you fall under different rules .. you can earn up to 45k before giving any back ..after fra there is no limit.. you can earn 3 dollars in that year you will be fra  before giving back.. that is just up to your birthday .. after it you have no more limit at fra

first year and the year you turn fra are subject to different rules..

there is is a lot of info out there  on this  stuff. I suggest you start to brush up on it because you are confused on lots of things


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## Phillip (Jan 13, 2019)

mathjak107 said:


> Wrong again .. the year you turn fra you fall under different rules .. you can earn up to 45k before giving any back ..after fra there is no limit.. you can earn 3 dollars in that year you will be fra  before giving back.. that is just up to your birthday .. after it you have no more limit at fra
> 
> first year and the year you turn fra are subject to different rules..
> 
> there is is a lot of info out there  on this  stuff. I suggest you start to brush up on it because you are confused on lots of things



Nope..Afraid not...$45,000 is what your allowed to make when you reach FRA....62-65 or whatever you can make no more than the 17,640...



> I suggest you start to brush up on it because you are confused on lots of things



Nothing to brush up on..They will change it agian tomorrow.



> there is is a lot of info out there on this stuff.



A lot of lies, little truth. They told me I will get my first check next month, you think I believe them? Hell no!


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## mathjak107 (Jan 13, 2019)

I have not seen any articles on the internet that had mis information about first year rules . They are pretty cut and dry .....  I think you just misunderstood what ss told you about January ... I can’t imagine them telling anyone that their first year earnings prior to filing count ..

and noooooo you are still wrong .". The year you will be fra you can earn up to 3750 a month UP  TO 45k UNTIL YOUR BIRTHDAY WHEN YOU TURN FRA .... ONCE YOU TURN FRA THERE IS NO MORE LIMIT FROM THE NEXT MONTH ON..

why do you insist on posting misinformation without looking it up ?   

Go go look up special rules for the year you will be fra and post what you find ... I am tired of explaining it to you only to have you wrongly argue


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## mathjak107 (Jan 13, 2019)

Here I will do it for you..

There is a larger earnings limit and a different rule that applies the year of your FRA. If you collect Social Security benefits during the year you reach FRA, Social Security will deduct $1 in benefits for every $3 you earn. In 2018, the limit on earnings for the year you reach FRA is $45,360 (up from the 2017 limit of $44,880, once you reach your birthday all earning limits end


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## Olivia (Jan 13, 2019)

mathjak107 said:


> why do you insist on posting misinformation without looking it up ?
> 
> Go go look up special rules for the year you will be fra and post what you find ... I am tired of explaining it to you only to have you wrongly argue



Some folks are just happier being unhappy. You're screwing that up for him.


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## mathjak107 (Jan 13, 2019)

As they say , never let facts get in the way of a good story. all the info is right on the ss site . instead of trying to argue what they obviously are not well versed in , go and look . or just google special rules for social security . it could not be spelled out any clearer in article after article .

i don't mind teaching someone who doesn't know  but then don't try to tell me i am wrong when this is basic stuff .  ...


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## Butterfly (Jan 13, 2019)

mathjak107 said:


> Here I will do it for you..
> 
> There is a larger earnings limit and a different rule that applies the year of your FRA. If you collect Social Security benefits during the year you reach FRA, Social Security will deduct $1 in benefits for every $3 you earn. In 2018, the limit on earnings for the year you reach FRA is $45,360 (up from the 2017 limit of $44,880, once you reach your birthday all earning limits end



Do you think the OP is confusing FRA (it was 66 for me) with the first year you are eligible to receive benefits (62 I think)?


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## mathjak107 (Jan 14, 2019)

no , because they know first year is capped at 17,640.00. but they refuse to listen to the fact that earnings before filing don't count . they still  remain ignorant of the fact the cap is 45k in the year you will be fra up until your birthday  , then once you hit fra there is no cap .

.... but they obviously don't want to learn or be corrected . so they can believe what they want as long as those here interested  in learning get it correctly .

there really is nothing conflicting at all about any of this . all the sites and articles have it correct . it is just the fact that those who get it wrong don't take the time to learn  so they spew  their incorrect interpretation of what they think they heard instead


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## mathjak107 (Jan 14, 2019)

for those who want to know more about just what the point of january filing is , this is about the best explanation i have seen . it only applies to those between fra and 70 .

[h=2]For Example…[/h][FONT=&quot]Let’s say you have a PIA of $2000 at your full retirement age of 66. And let’s say you turn 66 in June of 2015. You decide to wait until you turn 68 (two years past your FRA) to claim your benefit. You would then be entitled to a 16% higher benefit. When you file at age 68, you’re expecting to receive $2320 a month but when your first payment shows up the amount is for $2240.[/FONT]
[h=2]What happened?[/h][FONT=&quot]Because of how Social Security sets benefits, you only receive the delayed retirement credits that accrued as of Jan 1 the year you filed. Since you filed in June of 2017, you only get 18 months credit; 12 months for 2015 and 6 months for 2016. Based on this determination, you will only see an increase of 12% to your benefit instead of the 16% owed to you. Eventually you’ll get full 16%, but not right away.  You will have to wait until January 2018 to get credit for the 24 months of your delayed retirement credits. Then your benefit will increase to the expected $2320.[/FONT]
[h=2]Underpayment?[/h][FONT=&quot]You’ll notice that there are six months where you are essentially underpaid. From June 2017, until January 2018, you receive $80 less a month than what your retirement benefit should be. Unfortunately, there is no way to get this money back. Social Security will not make up the difference at a later date.[/FONT]
[h=2]Age 70[/h][FONT=&quot]For some strange reason, if you delay your retirement benefit until age 70, you will get your full 32% right away. The “January Rule” won’t apply. However, anyone filing between FRA and age 70 may lose out on some of their benefit, depending on the timing.[/FONT]


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## AZ Jim (Jan 14, 2019)

Phillip said:


> Still no help....$17,640 or $1450?


You need to speak with Social Security, we are all just seniors not experts.


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## mathjak107 (Jan 14, 2019)

he did and did not understand them ....

but this is still basic stuff . anyone who is getting ready to get social security should at least understand the basics . the first year  and fra  year earning cap rules are pretty basic stuff and are clearly explained  in every article about working and getting ss..

this is the problem today . most people know more about their car , sports scores   and refrigerator then they  do most things pertaining to the health of their financial well being . the average person puts in more time researching restaurants then learning about retirement planning , investing and social security which has a direct impact on them .


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## Outdoorsygal1 (Feb 1, 2019)

https://www.youtube.com/watch?v=5cj2_WWm_P0

The monthly limit applies the month you take social security. It remains in effect until the year you turn full retirement age when you are allowed to make alot more.Somewhere around 42-45K if I recall. So  both limits apply until the year you turn full retirement age.


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## mathjak107 (Feb 2, 2019)

finally someone who gets it .. this is not rocket science . it is pretty clear what the rules are if people want to learn .. there are two special rules , first year and the year you will be fra  which buck the  standard formula


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## Buckeye (Feb 2, 2019)

I think the OP has left the building


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## mathjak107 (Feb 2, 2019)

that's okay , the info is really here for everybody who needs to know ... i never really post just for the op ... usually when they argue and are wrong they vanish anyway .


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