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Automatic Increases
Retirement test exempt amounts
Wage-indexed amounts
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Application of lower exempt amount
The lower exempt amount applies in years prior to the year
a person attains his or her normal
retirement age. (A higher exempt amount
applies in the year a person attains normal retirement age.)
One dollar in benefits is deducted for every $2 in
earnings above the lower exempt amount.
Determination of the Lower Exempt Amount for 2008
The monthly exempt amount for 2008 is determined
to be the larger of:
- the 1994 monthly exempt amount multiplied by the ratio of the
national average wage index for 2006 to that for 1992, or
- the 2007 monthly exempt amount of $1,080.
If the amount so determined is not a multiple of $10, we round it to the
nearest multiple of $10. The annual exempt amount is then 12 times the
rounded monthly exempt amount.
Calculation details
Amounts in
formula |
1994 monthly exempt amount | $670 |
| 1992 average wage index | $22,935.42 |
| 2006 average wage index | $38,651.41 |
| Computation | $670 times ($38,651.41
divided by $22,935.42) equals $1,129.10, which rounds to
$1,130. |
| Higher amount | $1,130
exceeds $1,080, so the monthly exempt
amount for 2008 is $1,130 |
The annual exempt amount for 2008 is 12 times the monthly amount
$1,130, or $13,560.
Application of higher exempt amount
The higher exempt amount applies in the year
a person attains his or her normal
retirement age. (A lower exempt amount
applies in years prior to the year a person attains normal
retirement age.) In applicable months, $1 in benefits is deducted
for every $3 in earnings above the higher exempt amount.
Determination of the Higher Exempt Amount for 2008
The monthly exempt amount for 2008
is determined to be the larger of:
- the 2002 monthly exempt amount multiplied by the ratio of the
national average wage index for 2006 to that for 2000, or
- the 2007 monthly exempt amount of $2,870.
If the amount so determined is not a multiple of $10, we round it to the
nearest multiple of $10. The annual exempt amount is then 12 times the
rounded monthly exempt amount.
Calculation details
Amounts in
formula |
2002 monthly exempt amount |
$2,500 |
| 2000 average wage index | $32,154.82 |
| 2006 average wage index | $38,651.41 |
| Computation | $2,500 times ($38,651.41
divided by $32,154.82) equals $3,005.10, which rounds
to $3,010. |
| Higher amount | $3,010
exceeds $2,870, so the monthly exempt amount
for 2008 is $3,010 |
The annual exempt amount for 2008 is 12 times the
monthly amount $3,010, or
$36,120.
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