Along with a month-to-month publication overlaying retirement planning laws, IRA advisers Ed Slott and Co. additionally supply a wonderful month-to-month publication overlaying Social Safety points, written by Heather Schreiber.
Within the August publication, Schreiber coated laws that relate to limits of Social Safety advantages when beneficiaries proceed to work previous to reaching their full retirement age (FRA). She consists of info from Don Graves, president of the Housing Wealth Institute. He discusses unwelcome outcomes if Social Safety beneficiaries who obtain advantages from Supplemental Safety Revenue (SSI) or Medicaid don’t observe related guidelines.
Earnings checks
Social Safety laws use a two-tiered system for an annual earnings take a look at (AET). There’s one restrict for people who haven’t reached FRA for the whole yr, and there’s a greater restrict within the yr a person reaches FRA, which applies solely as much as the month earlier than FRA. Within the first tier, there’s a yearly restrict of $23,400. If a person earns both wages or self-employed earnings exceeding that restrict, Social Safety reduces Social Safety profit by $1 for each $2 earned above $23,400. Within the yr a employee reaches his FRA, the restrict modifications to $62,160. The penalty is $1 for each $3 above $62,160. After an worker reaches his/her FRA, there isn’t any longer a penalty.
There’s additionally a month-to-month earnings take a look at (MET) if a employee retires by mid-year, outlined as July 1, or later. Should you retired on or after July 1, you’d be eligible to obtain your full Social Safety profit, even when you earned greater than the annual earnings ranges referred to earlier. The MET permits beneficiaries to obtain full Social Safety advantages for any month they’re absolutely retired, or earn lower than the month-to-month earnings restrict, calculated as one-half of the annual earnings restrict divided by 12 ($1,950/month for 2025). Earnings earlier than reaching your FRA are disregarded.
For self-employed employees, the identical penalty would apply if the self-employed employee labored greater than 45 hours. The penalty would apply if the self-employed employee labored between 15 and 45 hours in a extremely expert” career. See https//safe.ssa.gov/apps10/poms.nsf/lnx/0302505080.
Social Safety Trustees Report
The Social Safety Trustees Report issued in 2025 signifies that the mixed OASDI belief funds can be depleted by 2034. Until Congress passes new laws to extend funding, Social Safety beneficiaries would obtain solely 81% of present advantages. For that motive, I’ve urged readers to contact their congressional representatives to suggest well timed options to extend Social Safety funding.
Reverse mortgages
People who obtain SSI or Medicaid advantages ought to know that these packages are thought-about “wants primarily based.” Each packages have asset restrictions. People who take part in needs-based packages are solely entitled to Social Safety advantages if they don’t preserve property above specified limits. Individuals in Medicaid should restrict their asset holdings, primarily based on state legislation. In lots of conditions, a Medicaid participant who holds greater than $2,000 in property would not be eligible for Social Safety advantages.
If asset holding is above specified ranges, the Social Safety Administration would cease advantages and ship a discover to the participant that that they had acquired overpayments, which they’d be required to repay.
People who have been accredited for a reverse mortgage, and acquired funding from a monetary establishment that accredited the reverse mortgage, and maintained greater than $2,000 in property could be going through a lack of advantages and a discover of a Social Safety overpayment.
For that reason, people accredited for a reverse mortgage should be very cautious to keep up asset ranges according to state legal guidelines. In any other case, they’d lose their Medicaid advantages and in addition be going through a invoice from Social Safety demanding compensation of advantages.
Request for reconsideration
Should you obtain an overpayment discover from Social Safety, it’s best to, inside 60 days, submit Kind SSA-561-U2, Request for Reconsideration. Submitting inside 60 days will droop SSA’s restoration effort stopping speedy withholding of future advantages whereas the case is being reviewed. It is best to present clear documentation once you obtain incomes info, akin to last pay stubs, W-2s or self employment data. In case your attraction is denied, you may request a listening to earlier than an administrative legislation decide.
Backside line: If you wish to proceed to obtain Social Safety advantages, you need to observe the principles related to SSI and Medicaid.
Elliot Raphaelson welcomes your questions and feedback at raphelliot@gmail.com.
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