17l threshold question

[dave123]

I'm retired now and receiving a pension. I know that I start losing money from my pension if I make over 17k a year. I've been blessed enough to land a job where I can make my own hours; so, I can make well over 17k if I work enough hours.

A couple questions if I may:

Is this determined by net or gross? Can I send much of the money to a company sponsored 401k to keep it under 17k?

Thank you very much.

dave

 

[Bullitt]

I'm sure you found your answer by now, but it's the Retirement Annuity Supplement (RAS) that will take the hit if you make over a certain amount. You lose $1 of RAS for every $2 you receive in earned income depending on the earnings test. I think that number is something close to $19,000 for 2021.

It is gross income is what matters. If you were to contribute to an IRA, it wouldn't lower your amounts for the earnings test.

There were a few people who retired years ago and came back to do odd jobs around the office. They were doing two days a week and kept talking about needing to keep their earnings under that amount. It was like a constant game they played.

 

[evilanne]

Here is an older version of the form OPM uses to determine if the supplement gets reduced https://www.opm.gov/forms/pdf_fill/ri92-022_2019_03.pdf. It is clear that it is your SS wages that they go by "Warning: Your earnings for 20XX will be verified through a computer match with the Social Security Administration's earning file. Any intentionally false statement or willful misrepresentation is punishable by fine, imprisonment, or both (18 U.S.C. 1001)."

The threshold for 2021 is $18,960
https://www.fool.com/retirement/2020/10/22/what-are-the-2021-social-security-earnings-test-li/

Does anyone know how often they check your other earnings for the supplement? When I did a search, for RI92-022 I only found one for 2016 & 2018 so is it every 2 years?

 

[Bullitt]

OPM sends a form in the mail where you report income for the prior year.

401k contributions will not lower your reportable income for RAS.

I was only able to find the 2018 on OPM website which was due by May 2019. COVID delays?

 

[dave123]

Hello. Does anyone know how much (or where to look) the cut off is for 2022?

thanx

 

[evilanne]

In case anyone else is looking, the amounts are under "Retirement Earnings Test Exempt Amounts"
https://www.ssa.gov/news/press/factsheets/colafacts2022.pdf
2021 $18,960/yr.
2022 $19,560/yr.

I did get a form to fill out earlier this year for 2020 to fill out and send back...seems like they ought to automate this online. I found the 2020 form online here https://omb.report/icr/202101-3206-003/doc/108189400
Still wondering if they will do it every year.