I am retiring on December 15th. I will receive my first social security check the 3rd week of January. I was told that I could only make around $1500 in December in order to get my full social security check in January. I figured out I would be making too much money so I was told that if I took a couple of days of vacation that the vacation pay would not count toward that $1500. Is that correct? I also get a travel reimbursement for days worked if I want it. Would this travel reimbursement count toward the $1500? If so I could forego that. Please advise.

Hi,

No. Your vacation pay would definitely count as earnings for purposes of Social Security's earnings test. Vacation pay can sometimes be considered as having been earned in a different month than the month in which it's paid, but if you'll still be working in December and if you receive vacation pay in that month then it will count toward your earnings limit for December.

Being reimbursed for travel expenses normally wouldn't count as earnings, so that would likely wouldn't be a problem However, if your employer deducts Social Security taxes from your travel pay then that means they consider the payment to be earned income, which would make it countable for Social Security earnings test purposes.

By the way, assuming that you will be under full retirement age (FRA) for the entire calendar year of 2020, then the exact amount that you're allowed to earn in December and still qualify to be paid benefits for that month based on Social Security's monthly earnings test is $1,520 (https://www.ssa.gov/benefits/retirement/planner/rule.html). If you earn even a dollar more than that you'll lose your entire monthly Social Security payment for that month unless you qualify to be paid based on the calendar year earnings test (https://www.ssa.gov/benefits/retirement/planner/whileworking.html).

Best, Jerry