New legislation introduced by Rep. Glenn Grothman, R-Wis., would raise the retirement earnings threshold from $21,240 to $30,000, with future increases tied to inflation.
The legislation, H.R. 6925, aims to increase the base exemption used by the Social Security Administration in determining the annual earnings limit for early retirees before monthly benefits are reduced.
It would boost "the annual earnings limitation to $30,000 (or $2,500 per month for less than full year calculations) for the year 2023 and adjusted for wage inflation in the following years as required by current law," the bill explains.
The current retirement earnings threshold (or RET) "is outdated and punishes some seniors returning to the workforce," Andrew Lautz, director of Federal Policy at the National Taxpayers Union, said in a statement.
Grothman's bill to increase the RET "would enable more early retirees to return to the workforce full- or part-time without fear of being penalized by the Social Security Administration," Lautz said. "The National Taxpayers Union is proud to support this bill."
If signed into law, the Senior Independence Act would take effect beginning in 2024, according to Grothman.
Issues at Stake
For individuals between the ages of 62 and the full retirement age of 67, $1 is deducted from Social Security benefit payments for every $2 earned above the annual limit.
For 2023, this limit is $21,240. In future years, the limit will be adjusted each year based on the National Average Wage Index. Under H.R. 6925, this limit would be raised to $30,000 annually.
Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, told ThinkAdvisor on Tuesday in an email that Grothman's bill "appears to be the type of bill that The Senior Citizens League would consider supporting."
