RETIREMENT EARNINGS LIMITATIONS TEST (2 OF 2)
01.Core Concepts
• Before normal retirement age: • $1 reduction for every $2 of earnings above $23,400 for 2025 • Applies monthly during first year of retirement • In the year retiree reaches normal retirement age: • $1 reduction for every $3 of earnings above $62,160 for 2025 • Only applies to earnings in the months before attaining normal retirement age • After attaining normal retirement age, $0 reduction. • Benefits to other family members based on worker benefit reduced by earnings test for covered worker • Family member with own earned income reduces only that person’s family benefit, not worker or other family members 25 TAXATION OF SOCIAL SECURITY BENEFITS (1 OF 3) • Retirees with substantial income in addition to Social Security benefits: • Up to 85% of the Social Security benefits may be taxable • MAGI = AGI + nontaxable interest + foreign earned income • “Combined” or provisional income = MAGI + ½ Social Security Benefit MFJ Single 1st Hurdle $32,000 $25,000 2nd Hurdle $44,000 $34,000