SSA “first-year rule”


Q. If I retire on Dec. 31, 2019, and start drawing Social Security on Jan. 1, 2020, would there be an offset if the amount of the final annual leave payout exceeded the Social Security earnings limit for 2020?

A. Probably not. That’s because of the Social Security Administration’s “first-year rule,” which applies to earnings for one year, usually the first year of retirement. It allows SSA to pay a full Social Security benefit for any whole month in which it considers you to be retired and when your earnings from wages or self employment are less than the annual threshold. You’ll find that threshold at


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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