Hi, I read on a web site that if you start SS prior to FRA and are self employed that SS will look at whether or not you are performing substantial services in each year up to FRA even if you are under the annual earnings limit. Is that incorrect?

Hi,

No. Substantial services in self-employment, which Social Security in most cases defines as devoting more than 45 hours to a trade or business in a month, is only considered if the self-employed person's net earnings exceed the annual earnings test exempt amount. Also, substantial services in self-employment, which is part of the alternate monthly retirement test, can only be used is the first year that a person collects benefits (https://www.ssa.gov/planners/retire/rule.html).

Therefore, if you file for reduced Social Security benefits prior to your full retirement age (FRA) and your earnings are below the annual earnings test exempt amount, it won't matter how much time you devote to your trade or business.

Best, Jerry