I am turning 62 and May and retiring in July. (earlier than expected but my job is intolerable) I plan to sign up with some temporary services. Work can be on and off. I understand there is a limit of $1420 a month. Supposed I earn 1000 in July and 200 in August and 1500 in September and 800 in October and 1700 in November and want to enjoy Christmas--So that would be 5200. As I will be collecting for half of 2018 I will be earning less than half of $17040. Would this be averaged to $866 a month? What would happen in august and October where I make over $1420 a month. Would I not get an SS benefit? Would have have to return $1 for every $2 I earned? Or do I have to tell the temp services I cannot continue working when I hit $1420 a month--meaning I will only be able to accept short term gigs.

Hi,

You can forget averaging your monthly earnings, as that's immaterial. In the initial year of your Social Security entitlement, in order to avoid having any of your benefits withheld you would need to meet at least one of two separate and distinct earnings tests. Those are the annual earnings test in which case your earnings for the entire calendar year of 2018 would need to be under $17,040 (https://www.ssa.gov/planners/retire/whileworking.html), or the monthly test in which your earnings must not exceed $1,420 in any months of your benefit entitlement (https://www.ssa.gov/planners/retire/rule.html).

Thus, in the example you present in your question, you would not be due any of your benefits for the 2 months of 2018 in which you earn more than $1,420 unless your total earnings for the calendar year (i.e. January - December) are below $17,040. The $1 for $2 withholding only applies to the annual test, not the monthly test.

Before filing for benefits, you may want to strongly consider using our maximization software in order to determine your best filing strategy.

Best, Jerry