Social security calculation of withholding penalty when continuing to work after retirement

Forum|Forum|1 year ago
February 28, 2025
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When continuing to work after retiring and less than full retirement age, is the social security withholding penalty ($1 for every $2) based on income before or after pre-tax deductions (HSA, 401K, healthcare premium)?

Not A Product Question

VolvoGirl

Employee

Will this help? See SS FAQ for working after retirement
https://www.ssa.gov/benefits/retirement/planner/whileworking.html

It says…
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.

KrisD15

It is based on earned income.

According to the SSA:
"When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits."

@T4Tigress

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