What Is the Social Security First Year of Retirement Rule?

The Social Security first year of retirement rule lets people exclude from Social Security’s annual earned income limit any pre-retirement wages they earn in the calendar year they start receiving Social Security retirement checks. This helps new retirees avoid the penalty for exceeding the annual earned income limit.

Collecting a Social Security retirement benefit while working? You could be penalized.

You can collect Social Security retirement benefits and still have a job, but there are limits on what you can earn before a penalty kicks in[0].

Are still employed when you begin taking Social Security retirement benefits and earn more than $21,240 annually from work. 

For many new retirees, that income limit seems to introduce a problem: If you begin taking Social Security retirement benefits midyear, what happens if you make more than the limit while you’re still working? Would your benefit checks suffer through your first year of retirement?

No. That’s where Social…

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This article was written by Kurt Woock and originally published on www.nerdwallet.com