New York Estate Planning & Elder Law Blog
The Social Security Administration recently released a list of changes to take place in 2017, which included the cost of living adjustment that we discussed in a previous article, as well as a new earnings test limits for those older adults who continue to work but qualify for social security. While the cost of living adjustment came out to a roughly $50 a year increase, the other changes listed by the Administration have encouraged many of those who receive their monthly benefits.
The Earnings Test
In order to provide the most equal distribution based on need, the Social Security Administration has come up with a test in order to determine how much in benefits an individual should be allotted. The earnings test applies to those older adults who have not yet reached their full age of retirement, which is 66 years old, and who are still working. For those beneficiaries who attain full retirement age after 2017, they can claim exemption of earnings up to $16,920 a year, or roughly $1,410 a month.
These savings translate into an additional $600 in Social Security checks per year for those beneficiaries who qualify. The test provides social security beneficiaries with more benefits while still enabling them to continue working. The 2017 numbers are a 7.6% increase from that of 2016, when beneficiaries could only claim exemption of $15,720 annually.
For those individuals who turn 66 years old during 2017, the can claim exemption of $44,880 a year or $3,740 a month, a significant increase of 7.2% from 2016. Upon reaching the age of attainment for full benefits, the earnings test no longer applies and you automatically qualify for full benefits, regardless of coverage. There are those who oppose the increase and change, worrying that it will impact their future social security benefits by causing increases to compensate for the reduced benefits prior to age attainment, however, with the recent political climate, many changes to social security and its administration may very well be on their way.
If you decide to claim benefits prior to your full retirement age but then decide you do not wish to take your benefits until the age of retirement, the Social Security Administration will allow a one time withdrawal of your application, contingent upon your refiling within a year of claiming the benefits and you must repay the money received by the Administration.