{ "id": "R41242", "type": "CRS Report", "typeId": "R", "number": "R41242", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "retrieved": "2023-06-11T04:05:12.056552", "id": "R41242_18_2023-05-10", "formats": [ { "filename": "files/2023-05-10_R41242_7394392d77ea3e99b07baefc26e29967c7473219.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R41242/18", "sha1": "7394392d77ea3e99b07baefc26e29967c7473219" }, { "format": "HTML", "filename": "files/2023-05-10_R41242_7394392d77ea3e99b07baefc26e29967c7473219.html" } ], "date": "2023-05-10", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R41242", "type": "CRS Report" }, { "source_dir": "crsreports.congress.gov", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "retrieved": "2023-06-11T04:05:12.052553", "id": "R41242_15_2021-02-09", "formats": [ { "filename": "files/2021-02-09_R41242_17a49db566d6fe13ea5ca8354910f2ba43f10186.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R41242/15", "sha1": "17a49db566d6fe13ea5ca8354910f2ba43f10186" }, { "format": "HTML", "filename": "files/2021-02-09_R41242_17a49db566d6fe13ea5ca8354910f2ba43f10186.html" } ], "date": "2021-02-09", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R41242", "type": "CRS Report" }, { "source_dir": "crsreports.congress.gov", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "retrieved": "2023-06-11T04:05:12.051833", "id": "R41242_14_2021-01-26", "formats": [ { "filename": "files/2021-01-26_R41242_916d47e020f02ff21eab34ddb8bc217b339cf143.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R41242/14", "sha1": "916d47e020f02ff21eab34ddb8bc217b339cf143" }, { "format": "HTML", "filename": "files/2021-01-26_R41242_916d47e020f02ff21eab34ddb8bc217b339cf143.html" } ], "date": "2021-01-26", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R41242", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 603804, "date": "2019-08-16", "retrieved": "2019-08-19T22:22:29.655135", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "summary": "Under the Social Security Retirement Earnings Test (RET), the monthly benefits of most Social Security beneficiaries who are below full retirement age (FRA)\u2014between 65 and 67, depending on year of birth\u2014are reduced if they have earnings that exceed an annual threshold. In 2019, a beneficiary who is below FRA and will not attain FRA during the year is subject to a $1 reduction in benefits for every $2 of earnings above $17,640. A beneficiary who will attain FRA in 2019 is subject to a $1 reduction in benefits for every $3 of earnings above $46,920. The annual thresholds ($17,640 and $46,920 in 2019) are typically adjusted each year according to national average wage growth.\nIf a beneficiary is affected by the RET, his or her monthly benefit may be reduced, in part or in full, depending on the total applicable reduction. For example, if the total applicable reduction is greater than the beneficiary\u2019s monthly benefit amount, no monthly benefit is payable for one or more months. If family members also receive auxiliary benefits based on the beneficiary\u2019s work record, the reduction is prorated and applied to all benefits payable on that work record (including benefits paid to spouses who are above FRA). The RET does not apply to Social Security disability beneficiaries, who are subject to separate limitations on earnings.\nIf a beneficiary is affected by the RET, his or her monthly benefit is recomputed, and the dollar amount of the monthly benefit is increased, when he or she attains FRA. This RET feature, which allows beneficiaries to recoup benefits \u201clost\u201d as a result of the RET, is not widely known or understood. This benefit recomputation at FRA adjusts (lessens) the actuarial reduction for early retirement before FRA that was applied in the initial benefit computation by taking into account months for which benefits were reduced in part or in full under the RET. \nThe RET has been part of the Social Security program, in some form, throughout the program\u2019s history. The original rationale for the RET was that, as a social insurance system, Social Security protects workers from certain risks, including the loss of earnings due to retirement. Therefore, benefits should not be paid to workers who demonstrate, through their level of earnings, that they have not \u201cretired.\u201d However, that rationale has changed, in part, over time. Specifically, in 2000, the RET was eliminated for those above FRA (it previously affected those above FRA until age 70). Because the RET does not apply to those who claim benefits after they have attained FRA, Social Security benefits become annuitized after FRA. \nStudies have shown that the RET has significant impacts on individuals\u2019 earnings levels via their hours worked. Specifically evidence shows bunching of individual earnings around the RET threshold levels. However, there is little evidence that the RET has an impact on the overall labor force participation rate. When considering a repeal of the RET, research indicates a repeal would have different impacts across the wage spectrum. Specifically, it would likely incentivize the highest earners\u2014whose entire benefits were withheld due to the RET\u2014to decrease work, receive full benefits, and experience an increased income level overall. Research also suggests that a repeal of the RET would lead to earlier benefit claiming and increased poverty rates, especially among women and those aged 80-89. \nThe Social Security Administration\u2019s (SSA\u2019s) Office of the Chief Actuary (OCACT) estimates that, over the long-range projection period (2019-2093), the elimination of the RET would have a relatively small positive effect on the solvency of the Social Security Trust Funds. This is primarily due to the fact that the increases in permanent early retirement reductions for entitlement at age 62 are projected to outweigh the increases in benefit entitlements.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R41242", "sha1": "8da84b8cd69dbc8f3e3e2f63a62ee4d920002031", "filename": "files/20190816_R41242_8da84b8cd69dbc8f3e3e2f63a62ee4d920002031.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R41242", "sha1": "1d8cd6a9e957929d6eb753552eca6c23303e2d0c", "filename": "files/20190816_R41242_1d8cd6a9e957929d6eb753552eca6c23303e2d0c.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 416435, "date": "2012-01-04", "retrieved": "2016-04-07T00:22:09.568553", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "summary": "Under the Social Security Retirement Earnings Test (RET), the monthly benefit of a Social Security beneficiary who is below full retirement age (FRA) is reduced if he or she has earnings that exceed an annual threshold. In 2012, a beneficiary who is below FRA and will not attain FRA during the year is subject to a $1 reduction in benefits for each $2 of earnings above $14,640. A beneficiary who will attain FRA in 2012 is subject to a $1 reduction in benefits for each $3 of earnings above $38,880. The annual exempt amounts ($14,640 and $38,880 in 2012) generally are adjusted each year according to average wage growth.\nIf a beneficiary is affected by the RET, his or her monthly benefit may be reduced in part or in full, depending on the total applicable reduction. For example, if the total applicable reduction is greater than the beneficiary\u2019s monthly benefit amount, no monthly benefit is payable for one or more months. If family members also receive auxiliary benefits based on the beneficiary\u2019s work record, the reduction is pro-rated and applied to all benefits payable on that work record (including benefits paid to spouses who are above FRA). For example, in the case of a family consisting of a worker beneficiary who has earnings above the annual exempt amount and a spouse and child who receive benefits based on his or her work record, the benefit reduction that applies under the RET is charged against the total family benefit.\nThe RET has been part of the Social Security program in some form throughout the program\u2019s history. The original rationale for the RET was that, as a social insurance system, Social Security protects workers from certain risks, including the loss of earnings due to retirement. Therefore, benefits should be withheld from workers who show by their earnings that they have not \u201cretired.\u201d The RET does not apply to Social Security disability beneficiaries who are subject to separate limitations on earnings.\nIf a beneficiary is affected by the RET, his or her monthly benefit is recomputed, and the dollar amount of the monthly benefit is increased, when he or she attains FRA. This feature of the RET, which allows beneficiaries to recoup benefits \u201clost\u201d as a result of the RET, is not widely known or understood. The benefit recomputation at FRA is done by adjusting (lessening) the actuarial reduction for retirement before FRA that was applied in the initial benefit computation to take into account months for which benefits were reduced in part or in full under the RET. Any spousal benefits that were reduced because of the RET are recomputed when the spouse attains FRA. For a spouse who has already attained FRA, however, there is no subsequent adjustment to benefits to take into account months for which no benefit or a partial benefit was paid as a result of the RET.\nThe Social Security Administration estimates that elimination of the RET for individuals aged 62 or older would have a negative effect on the Social Security trust fund in the amount of $81 billion from 2012 to 2018, although it would have no major effect on Social Security\u2019s projected long-range financial outlook.\nThis report explains how the RET works under current law. In addition, it provides benefit examples to illustrate the effect of the RET on Social Security beneficiaries who are below FRA and family members who receive benefits based on their work records. It also briefly discusses policy issues, including recent research on the effect of the RET on work effort and the decision to claim Social Security benefits. This report will be updated periodically.", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R41242", "sha1": "0c4d383d3c263bd6108994b948b35170308c73ec", "filename": "files/20120104_R41242_0c4d383d3c263bd6108994b948b35170308c73ec.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R41242", "sha1": "3f1daf3a04d473da5fd2a08a45321e834ed9455c", "filename": "files/20120104_R41242_3f1daf3a04d473da5fd2a08a45321e834ed9455c.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc806857/", "id": "R41242_2011Jan14", "date": "2011-01-14", "retrieved": "2016-03-19T13:57:26", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "summary": "Social Security benefits received before a person attains full retirement age (FRA) are subject to an actuarial reduction for early retirement and also may be reduced by the Social Security Retirement Earnings Test (RET) if the beneficiary has earnings that exceed an annual threshold. This report explains how the RET is applied under current law and provides detailed benefit examples to show how the RET affects both the worker beneficiary and any family members (auxiliary beneficiaries) who receive benefits based on the worker beneficiary\u2019s record. The report points out features of the RET that are not widely known or understood, such as the recomputation of benefits when a beneficiary attains FRA to adjust (increase) benefits to take into account months for which no benefit or a partial benefit was paid as a result of the RET. Finally, the report discusses policy issues related to the RET, including recent research on the effect of the RET on work effort and the decision to claim Social Security benefits.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20110114_R41242_f4883a55ffa3518def140e2166299111c9a955da.pdf" }, { "format": "HTML", "filename": "files/20110114_R41242_f4883a55ffa3518def140e2166299111c9a955da.html" } ], "topics": [ { "source": "LIV", "id": "Social security", "name": "Social security" }, { "source": "LIV", "id": "Retirement", "name": "Retirement" }, { "source": "LIV", "id": "Retirement income", "name": "Retirement income" }, { "source": "LIV", "id": "Pensions", "name": "Pensions" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc812981/", "id": "R41242_2010May17", "date": "2010-05-17", "retrieved": "2016-03-19T13:57:26", "title": "Social Security Retirement Earnings Test: How Earnings Affect Benefits", "summary": "Social Security benefits received before a person attains full retirement age (FRA) are subject to an actuarial reduction for early retirement and also may be reduced by the Social Security Retirement Earnings Test (RET) if the beneficiary has earnings that exceed an annual threshold. This report explains how the RET is applied under current law and provides detailed benefit examples to show how the RET affects both the worker beneficiary and any family members (auxiliary beneficiaries) who receive benefits based on the worker beneficiary\u2019s record. The report points out features of the RET that are not widely known or understood, such as the recomputation of benefits when a beneficiary attains FRA to adjust (increase) benefits to take into account months for which no benefit or a partial benefit was paid as a result of the RET. Finally, the report discusses policy issues related to the RET, including recent research on the effect of the RET on work effort and the decision to claim Social Security benefits.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20100517_R41242_25df64a2d8ceb0b90aff4146d8cd9a1fef29f438.pdf" }, { "format": "HTML", "filename": "files/20100517_R41242_25df64a2d8ceb0b90aff4146d8cd9a1fef29f438.html" } ], "topics": [ { "source": "LIV", "id": "Social security", "name": "Social security" }, { "source": "LIV", "id": "Retirement", "name": "Retirement" }, { "source": "LIV", "id": "Retirement income", "name": "Retirement income" }, { "source": "LIV", "id": "Pensions", "name": "Pensions" } ] } ], "topics": [ "Domestic Social Policy", "Economic Policy" ] }