Outside Earnings

AAA

DEFINITION of 'Outside Earnings'

Income that temporarily reduces a retired individual's Social Security benefits. Outside earnings from continued work only reduce Social Security benefits for individuals who retire before the age the Social Security Administration defines as full retirement age (currently 65 to 67, depending on year of birth). Retirees who see their benefits reduced because of outside earnings may see these lost benefits restored if they live long enough.

INVESTOPEDIA EXPLAINS 'Outside Earnings'

Social Security benefits are not reduced by outside earnings until income exceeds an annual threshold. They also don't lower Social Security benefits for individuals who are full retirement age or older. Rules about outside earnings mean that individuals must carefully consider decisions about employment and retirement age if they want to maximize their Social Security benefits.



RELATED TERMS
  1. Ability To Pay

    An economic principle stating that the amount of tax an individual ...
  2. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  3. Income Tax

    A tax that governments impose on financial income generated by ...
  4. Gross Income

    1. An individual's total personal income before taking taxes ...
  5. Medicare Wages

    An employee's earnings that are subject to a U.S. payroll tax ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that ...
Related Articles
  1. How Much Social Security Will You Get?
    Retirement

    How Much Social Security Will You Get?

  2. Tips On How To Use IRAs To Boost Retirement ...
    Retirement

    Tips On How To Use IRAs To Boost Retirement ...

  3. 5 Tax(ing) Retirement Mistakes
    Retirement

    5 Tax(ing) Retirement Mistakes

  4. Avoid The Social Security Tax Trap
    Taxes

    Avoid The Social Security Tax Trap

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center