Retirees face two wage thresholds—$24,480 and $65,160—with benefits withheld based on earnings before full retirement age.
Social Security applies two earnings limits for retirees: $24,480 for those under full retirement age (FRA) and $65,160 in the year they reach FRA. Only wages earned before the FRA month count toward the higher limit, while earnings after FRA face no test regardless of amount.
The lower threshold applies to most workers, but those reaching FRA in a given year benefit from the higher cap. Misunderstanding these rules can lead to unexpected benefit withholding, as earnings timing around the FRA month determines reductions.
A retiree earning $80,000 in their FRA year may avoid withholding entirely if wages are concentrated after their FRA month, highlighting the importance of income planning.