September 19, 2018 | by Chris Stein, CFP®, Finance Instructor at Colorado State University
What Counts as Earnings

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Question from reader: “In one of your post you write; ‘You are exposed to the Earnings Test that will reduce your benefit if you earn more than a specific amount each year before your FRA. Once you reach FRA you can earn as much as you want without it affecting your benefit (it may cause a taxation issue, though).’

When you say ‘earn’, are you referring to regular income not retirement income? Often in articles they use ‘income’ but do not define which ‘income’ they mean. The IRS has differing categories of ‘income’.”

Earnings Test “Earnings” Defined

The good news with the earnings test is that Social Security only considers “earnings from work” in their calculation.  This basically means gross wages from an employer, or net earnings from self-employment.  No other “earnings” matter for this calculation.


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