Annual Exempt Amounts

1803. Annual Exempt Amounts

1803.1 How is the annual exempt amount determined?

There is an annual exempt amount prior to year of FRA (see §723.5) attainment. In the year you reach FRA, you are subject to a different annual exempt amount. The exempt amounts also vary from year to year according to increases in the nationwide earnings level. The exempt amounts are computed each year according to the formula provided in the Social Security Act. This formula takes into account increases in national earnings levels.

1803.2 What are the annual exempt amounts?

The chart below shows the annual exempt amounts for the years 1985 through 2006:


Annual Exempt Amounts

Year

Age 65-69

Under Age 65

1985

$7,320

$5,400

1986

$7,800

$5,760

1987

$8,160

$6,000

1988

$8,400

$6,120

1989

$8,880

$6,480

1990

$9,360

$6,840

1991

$9,720

$7,080

1992

$10,200

$7,440

1993

$10,560

$7,680

1994

$11,160

$8,040

1995

$11,280

$8,160

1996

$12,500

$8,280

1997

$13,500

$8,640

1998

$14,500

$9,120

1999

$15,500

$9,600

Year of Full Retirement Age

Prior to Year of Full Retirement Age

2000

$17,000

$10,080

2001

$25,000

$10,680

2002

$30,000

$11,280

2003

$30,720

$11,520

2004

$31,080

$11,640

2005

$31,800

$12,000

2006

$33,240

$12,480

2007

$34,440

$12,960

1803.3 How do you know which exempt amount applies?

The higher exempt amount applies if you reach full retirement age (65 and 2 months in 2003) (see §723.5) on or before the last day of the taxable year involved. The lower exempt amount applies if you do not turn full retirement age on or before the last day of the taxable year.

Dr. James, who reports his earnings on a calendar year basis, turns age 65 and 2 months on June 18, 2003. The lower exempt amount ($11,280) applies for calendar year 2002, and the higher exempt amount ($30,720) applies January through May for calendar year 2003. The FRA no longer applies from the month of FRA attainment and on.

(See §1808.2 for test used when a beneficiary dies in the year of turning FRA.)

Last Revised: Jul. 30, 2007

Comments

When will we get enough money

October 22, 2011 by Guest

When will we get enough money to cover the cost of living for todays econony?We paid this money in while working ! Why is it so hard to collect the monies u paid out ? Is this trully the american WAY? If so we're living in the wrong country!

COLA increase of 3.6 percent in January, 2010

October 22, 2011 by David Luhman

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012.

The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.

http://www.ssa.gov/cola/

discuss retirement and options

June 12, 2012 by Guest

I am 61 and will qualify for early retirement on Sept 4, 2012. I am still employed and under contract with a company for another 14 months. Beginning in Sept 2012 my salary will decrease by 25 % per quarter until next fall when I will switch from salary to commissions only. I plan to continue to work but draw my benefits as well. My wife is 64 and has a medical condition which prevents her from working, she only has 30 credits towards SS benefits. I would like to discuss our situation and make preparations for early retirement. Can I go to the local office and meet with an agent to discuss this? We have plenty of questions and are not sure exactly what our approach should be.

Discussion retirement options

June 12, 2012 by David Luhman

Yes, contacting the SSA directly for your particular case is recommended. However, your mileage may vary as different offices have different case loads and experience of personnel varies.

Before going, you'll want to do as much research on your own.

Here are a couple places to start :

http://www.ssa.gov/pubs/10035.html

http://www.ssa.gov/pubs/10510.html

I suggest delaying the start of retirement benefits as long as practical because :

  • Your benefit will increase by about 0.5 percent per month of delay
  • If you work while receiving benefits your benefits may be reduced (but later recoverable)
  • Working while receiving benefits may make your Social Security benefits subject to income tax

http://www.ssa.gov/retirement/1943.html

http://www.ssa.gov/retire2/whileworking.htm

http://www.ssa.gov/planners/taxes.htm

Full retirement age in december 2013

June 18, 2012 by Guest

If I file for retirement in October 2012 and do not get a check until January 2013 can I make any amount in the 2013 year since I will be full retirement age in December of 2013

Full retirement age and effect of earnings limit

June 18, 2012 by David Luhman

Your statement does not sound accurate. Please see this example which is very similar to what you propose :

http://www.socialsecurity.gov/pubs/10069.html#a0=0

widow as of July 2011 after 42 yrs of marriage

July 29, 2012 by Guest

I am 63 1/2...am currently working so was advised could not get my husbands social security due to yearly wages over 14, 000
question-If I stop working, how long would it take and what would I need to do to start getting my husbands social security?
thank you

Effect of earnings limit and full retirement age

July 30, 2012 by David Luhman

You'll want to contact Social Security for your particular case. However, it sounds like you have at least a couple things to consider.

First, since you're working, if you were to apply for survivor benefits and you earn more than $14,640 (year 2012), then $1 in benefits will be deducted for each $2 you earn above $14,640 until you reach full retirement age (FRA) which is 66 years for you.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/302

Second, the longer you delay starting survivor benefits, the larger your monthly check. For each month you delay benefits, your monthly check will increase by about 0.4 percent.

http://www.ssa.gov/survivorplan/1945s.html

You may want to continue working for a while for increased savings from work and for a higher monthly benefit.

Outdated Information!

December 11, 2012 by Walt 778

This site has outdated information. You are unable to get a newer 1803.2 "What are the annual exempt amounts?" than 2007!!

Earnings limit numbers

December 11, 2012 by David Luhman

Updated earnings limit numbers are available here :

http://www.ssa.gov/pubs/10069.html