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If you choose to collect Social Security retirement benefits before your full retirement age, the Social Security Administration will start to reduce your benefits by $1 for every $2 you earn above a threshold. This threshold is $15,720 for 2015 and only applies to each individuals earned income, from wages reported on W-2 or self-employment income. Earned income does not include pensions, IRA distributions, interest, dividends, and capital gains. In addition, the reduction for each spouse’s benefits is determined separately based on each one’s earned income. However, once you reach full retirement age, you will no longer be subject to having your benefits reduced due to your earned income, and can earn as much as you can without losing any benefits. In addition, is you have been working from 62 to full retirement age, your benefits will be recalculated to give you additional credits for the performed while collecting Social Security.
However, regardless of age and when you choose to collect your benefits, Social Security benefits are always taxable up to 85% based upon a sliding scale of adjusted gross income (AGI). AGI includes all forms of income, not just earned income. If a joint tax return is filed, the amount of taxable Social Security benefits is determined based upon both spouses combined income.
I hope this answers your question. Please let me know if I can clarify anything or answer any additional questions. Thanks, Jonathan