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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 2009
The monthly exempt amount for 2009 is determined
to be the larger of:
- the 1994 monthly exempt amount multiplied by the ratio of the
national average wage index for 2007 to that for 1992, or
- the 2008 monthly exempt amount of $1,130.
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 |
| 2007 average wage index | $40,405.48 |
| Computation | $670 times ($40,405.48
divided by $22,935.42) equals $1,180.34, which rounds to
$1,180. |
| Higher amount | $1,180
exceeds $1,130, so the monthly exempt
amount for 2009 is $1,180 |
The annual exempt amount for 2009 is 12 times the monthly amount
$1,180, or $14,160.
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 2009
The monthly exempt amount for 2009
is determined to be the larger of:
- the 2002 monthly exempt amount multiplied by the ratio of the
national average wage index for 2007 to that for 2000, or
- the 2008 monthly exempt amount of $3,010.
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 |
| 2007 average wage index | $40,405.48 |
| Computation | $2,500 times ($40,405.48
divided by $32,154.82) equals $3,141.48, which rounds
to $3,140. |
| Higher amount | $3,140
exceeds $3,010, so the monthly exempt amount
for 2009 is $3,140 |
The annual exempt amount for 2009 is 12 times the
monthly amount $3,140, or
$37,680.
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