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What is the Social Security Earnings Limit?
Usually people retire early and at the same time they work as they think that the funds they receive as social security benefits are not enough for them to live on. However, when people retire early and they go on to work, there is a certain social security earnings limit set for them. This amount usually changes each year.
In some cases, however, people think if they continue working after they have retired, their benefits will be reduced so much that they will not be able to gain any profit. But this is not a true supposition as it can really be quite advantageous to retire early and to work at the same time.
It should be noted that the earliest age one can receive his/her social security retirement benefits is 62. The full retirement age is rising depending on the year the person was born.
Thus, the social security earnings limit is a concept according to which if a person has retired early and he/she earns more than a set amount, then his/her social security benefits will be reduced.
In 2013 the social security earnings limit per year is $15,120. If the early retired person exceeds this amount before his/her full retirement age, then he/she will have to face the limit which is $1 for every $2 earned.
During the year the person reaches his/her full retirement age, the social security will take $1 for every $3 earned. After you reach your full retirement age, you will be allowed to earn as much money as you want without worrying about the social security earnings limit.
You are required to inform the Social Security Administration about the change in your income if it exceeds the social security earnings limit. Of course, the Social Security Administration performs checks of the income received by people; however, if you fail to notify them about the changes in your income, you may have to face big penalties for that.