Is there a limit on the amount a person over 70 is allowed to earn per year if they are on social security?

Is there a limit on the amount a person over 70 is allowed to earn per year if they are on social security?
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#1

Is there a limit on the amount a person over 70 is allowed to earn per year if they are on social security?


#2

There is no limit - social security benefits are not reduced by the earnings limit once full retirement age (FRA) is reached.  For those age 60 and up in 2014, FRA is 66. 


#3

Not only is there no limit, but you can continue contributing to an IRA (Roth or traditional) or 401k. In addition, you can delay taking Required Minimum Distributions (RMDs) from your 401k as long as you remain employed.

Good luck and I hope this helps!


#4

The first factor to consider is the Social Security “give-back.” If you are age 62 or older, but still under the full retirement age (65–67 depending on your birth year), and receiving reduced Social Security benefits, you must “give back” $1 for every $2 earned above $15,120 in 2014. If you reach full retirement age in 2014, your benefits are reduced by $1 for each $3 earned over $40,080 in months prior to your full retirement age. When you reach your full retirement age, there is no limit on your earnings, and Social Security benefits are not reduced.

This is just in regards to benefits being payable.  This is not for taxes or Required Minimum Distributions from an IRA.  

Craig W. Smalley, E.A. 

Admitted to Practice Before the Internal Revenue Service


#5

As others have said the earnings test that limits how much earned income you can have before Social Security benefits are withheld (temporarily) no longer applies upon reaching full retirement age.  The law was changed in 2000 to eliminate the earnings test after FRA.

Note that to the extent your current income exceeds that for earlier years your monthly benefit may be increased.  Your monthly benefit is calculated based on the average of your highest 35 years of lifetime earnings so if you earn more than in any of those earlier years your benefit will go up.  

Remember as well that while the earnings test goes away taxes never do.   Up to 85% of your benefit may be subject to income taxation depending on your AGI  and the size of your benefit. 


#6

You have great answers below. So you probably have your answer.

I would suggest, if you have other money that is providing you income that you do a risk tolerance analysis and determine how vulnerable you are if there is another convulsion in the market. The ideal is to take 5 years of income (whatever you are pulling off your IRA for instance each year) and set it aside as a guaranteed amount. Then you don't have to worry about convulsions. Then take earnings of the remainder of your money, and keep your 5 year bucket filled.

Hope this helps.


#7

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