The Social Security Administration has released benefit amounts for 2020 (linked below). As you read through the changes, pay particular attention to the Retirement Earnings Test Exempt Amounts. Persons born in 1954 attain full retirement age in 2020 and their exempt amount has increased from $46,920 to $48,600 per year. Only W-2 and self-employment count as earnings. This amount only applies to months prior to their full retirement month.

Persons born early in 1954 have the advantage of taking their benefit in January 2020 at a slight reduction and suffering no loss due to the earnings test because Social Security only counts the earnings prior to your full retirement month. Thus, someone born in June 1954 reaching full retirement age in June 2020 is only earning $41,667 between January and May 2020 if they are earning $100,000 from work for the entire year. Benefits are due starting January 2020 if they want them.

It is advisable to do the math for 2020 in the fall of 2019 so you don’t leave thousands of dollars on the table.

I will have quarterly updates in 2020. Happy New Year to everyone!

Click here to see the 2020 Social Security Fact Sheet for information on upcoming changes.