Earnings Limit

• After you retire, you can continue to work while receiving Social Security benefits, but your benefits will be reduced if your earnings exceed certain limits during the months before you reach your full retirement age. Your monthly benefits could be reduced by $1 for each $2 to $3 of your earnings that exceed the limit, depending on your age.
  
  

Deferred Compensation

• Your earnings are counted toward the annual earnings limit based on when you earn them, not when they are paid to you. Deferred compensation, or deferred income, such as accumulated sick or vacation pay, bonuses and stock options, will be counted toward the earnings limit for the year you earned them even if you do not receive the compensation until a subsequent year.
  
  

Exception

• If you retire during the year, you may have already earned wages up to or beyond the annual earnings limit. In this case, a special rule allows you to receive Social Security benefits during the first year of retirement based on your monthly, rather than annual, earnings.