Herb Kohl: “when the Social Security system was established, a retirement test, also referred to as an earnings test, was made part…”

“when the Social Security system was established, a retirement test, also referred to as an earnings test, was made part of the criteria for determining an individual's benefits. This criterion was established because Social Security benefits are intended to replace, in part, earnings lost by an individual or family because of retirement, disability, or death. Therefore, benefits are withheld from individuals who show by their substantial earnings from work that they are not in fact ``retired''. What this means today is that recipients aged 62-65 could earn up to $10,080 annually without having their benefits affected, and those between 65-69 could earn up to $17,000 a year. For earnings above these limits, recipients aged 62-65 lose $1 in benefits for each $2 of earnings while those between 65 and 69 lose $1 in benefits for each $3 in earnings. The earnings test does not apply to recipients age 70 and over, and the exempt limits increase each year at the same rate as average wages in the economy. Currently, it is estimated that there are approximately 600,000 recipients age 65-69 affected by the earnings limit test. Today we are repealing the earnings limit for people between the full retirement age and age 69, giving them the opportunity for increased financial security, and providing an increase in skilled workers during this tight labor market. Removing the earnings limit will provide seniors with greater independence and financial security.”