Am I Understanding The Earnings Test Rules Correctly?

Nov 18 2019 - 12:57pm

I am thinking about turning on my wife's social security ( or half of mine and let her's grow) starting 1/1/20. She will be 66 on Nov 20, 2020. She makes about $60k/year. The SSA website states…

In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit. In 2020, the limit on your earnings is $48,600, but we only count earnings before the month you reach your full retirement age.

If I am reading that correct they would only count the $50k she earns in Jan thru Oct. She would only be over the limit by $1,400. Does this make sense to you or am I looking at this wrong?


Yes, it sounds like you're correctly interpreting the earnings test rules. In the year that a person reaches their full retirement age (FRA), a higher earnings test exempt amount applies and only earnings in the months prior to the month that the person reaches FRA counts for earnings test purposes. The earnings test exempt amount for people who reach FRA in 2020 is $48,600, and only $1 of their benefits is withheld for every $3 of excess earnings instead of the $1 withholding for every $2 of excess earnings that applies for people who reach FRA after 2020.

However, before you and your wife decide on when you should apply for your Social Security benefits, you should strongly consider using our software ( to fully explore and compare your options so that you can determine the best way to maximize your benefits.

Best, Jerry