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Hello,
My question concerns the way the reduction in social security benefits is calculated when you are working while you are still under full retirement age. Up to roughly $21,000 there is no reduction and beyond that there is a $1 reduction for every @$2 earned above the threshold amount of about $21,000. My question is whether this is based on gross income or net income. For example, if I receive a gross pay of $40,000 YTD and, and I have thus far received a net income of $26,000, will my reduction in benefits be based on the $40,00 number or $26,000? In other words, am I about $4,00 over the $21,000 threshold amount or $19,000 over it?
I guess this boils down to knowing exactly what is meant by the word "earn". Is it gross pay or net pay?
Thank you.
Jacob
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