To more directly answer your original question: The indexation factors for 2025 retirement calculations use the ratio of the Average Wage Index (AWI) from the year you turn 60 compared to the AWI for each earlier year you worked. For example, if you're turning 62 in 2025 (born in 1963), your indexation year would be 2023 (the year you turned 60). So if the AWI for 2023 was $65,839.55, and the AWI for 1990 was $21,027.98, the indexation factor for your 1990 earnings would be approximately 3.13 (65,839.55 ÷ 21,027.98). Your actual earnings from 1990 would be multiplied by this factor to determine their indexed value. The SSA then takes your highest 35 years of indexed earnings to calculate your Average Indexed Monthly Earnings (AIME), which becomes the basis for your Primary Insurance Amount (PIA).

Just wanted to add that you can also create a my Social Security account at ssa.gov to see your complete earnings history and get benefit estimates. The online tools there will show you exactly how your indexed earnings are calculated, and you can run different scenarios (like working until 65, 67, or 70) to see how it affects your monthly benefit. Since you're 58, this is perfect timing to start planning your optimal claiming strategy. The account also lets you download your Social Security Statement which breaks down the indexation calculations year by year.

Thank you all for the helpful responses! Just to summarize what I've learned: 1. SS counts NET earnings for self-employed people (not gross) 2. It's specifically the amount on Schedule SE line 6 3. They multiply net earnings by 92.35% when calculating for the earnings limit 4. Only earnings before my FRA month (November) count toward the 2025 limit 5. I might be able to shift some income to Nov/Dec to stay under the limit This is such a relief since my net earnings will be under the limit! I'm going to call SSA just to confirm everything (using that Claimyr service someone mentioned since I haven't been able to get through normally). Thanks again for all your help!

As someone who just went through this exact situation last year, I can confirm what others have said - it's definitely your NET earnings that count, not gross! I was terrified I'd gone over the limit because my 1099s totaled around $80k, but after business expenses my actual net was well under the threshold. One thing I learned the hard way though - make absolutely sure you're tracking every legitimate business expense throughout the year, not just scrambling at tax time. The IRS (and by extension SSA) wants to see consistent, reasonable business expenses. I keep a dedicated business checking account and credit card to make the paper trail crystal clear. Also, since you're turning 66 in November, you're in a great position to manage your income strategically for those last few months before FRA. Any chance you can defer some invoicing until after your birthday month?

I'm in a very similar situation and this thread has been incredibly helpful! I'm 65, just started collecting SS benefits a few months ago ($1,650/month), and I'm still working part-time making about $16,000/year. Like so many others here, I had no idea Social Security benefits could be taxable when I first signed up. Reading through everyone's experiences, it's clear that 10% withholding is probably the right choice for our income levels. I'm definitely going to download that W-4V form and get it submitted this week. Better to be safe than sorry! One thing I'm curious about - has anyone here tried using the IRS withholding calculator online to double-check what percentage might work best? I found it at irs.gov and it seems like it might help confirm whether 10% is the right amount for my specific situation. Just thought I'd mention it in case others want to cross-check their decision. Thanks to everyone for sharing their experiences - it's so reassuring to know we're all navigating this together!

I'm 66 and went through this exact same confusion when I started getting SS benefits last year! Nobody warned me that Social Security could be taxable - I thought it was like getting back money I'd already paid in. Boy was I wrong! I ended up owing about $900 at tax time because I had zero withholding. After that wake-up call, I immediately filed the W-4V form for 10% withholding. It's been working perfectly - I actually got a small refund this year instead of owing money. The form is super simple to fill out once you download it from ssa.gov. Just make sure you clearly mark which percentage you want (I almost checked the wrong box!). And definitely mail it certified or take it to the local SSA office in person so you have proof they received it. With your income levels, 10% withholding sounds like the right choice. The peace of mind is totally worth it - no more tax day surprises!

I just went through this exact decision process last year and ended up waiting until FRA - best choice I made! Like you, I was earning well above the limit (about $6,000/month) and initially thought I'd get some reduced benefit. The reality check came when I used the SSA's online calculator and realized I'd receive exactly $0 in monthly payments while still getting hit with the permanent early filing reduction. What really sealed the deal for me was learning that those "withheld" benefits don't just disappear - they get recalculated at FRA, but you're still stuck with the early filing penalty forever. So I'd be getting a smaller benefit for the rest of my life just to receive zero payments for a few years. Made no sense. Instead, I'm using these high-earning years to max out my 401k contributions and build a bigger bridge to FRA. The delayed gratification is worth it when you run the lifetime benefit numbers. At your income level, I'd strongly suggest the in-person SSA appointment route that others mentioned - seeing those scenarios side by side in black and white really drives home how the math works out.

Wow, this thread has been incredibly educational! I'm 61 and was planning to file at 62 while keeping my consulting work that brings in about $5,000/month. After reading everyone's experiences, especially the reality that you can receive $0 in benefits while still being locked into that permanent early filing reduction, I'm completely reconsidering my timeline. The math seems pretty clear - if you're earning significantly above the annual limit, there's really no advantage to filing early unless you're planning to drastically cut your income right away. What really struck me was Santiago's point about using these high-earning years to maximize retirement contributions instead of trying to claim reduced Social Security benefits you won't even receive. I think I'm going to follow the advice here and schedule an in-person appointment at my local SSA office to run my specific numbers. The idea of seeing the lifetime benefit comparisons laid out clearly sounds like exactly what I need to make an informed decision. Has anyone found that the local offices are more helpful than the national phone line for getting these detailed projections? I'm hoping to avoid the phone system nightmare that several people mentioned! Thanks to everyone who shared their real experiences - this community discussion has been far more valuable than anything I've found on the official SSA website.

Congratulations on your approval! I can totally understand that shock and excitement - getting approved feels surreal after such a long, stressful process. Unfortunately, your first payment almost certainly won't arrive tomorrow, even though your letter mentions February 2025. What that date means is when you're officially entitled to start receiving benefits, but there's additional processing time needed for the actual payment to hit your account. Think of it as the difference between "you're approved to receive money starting February" versus "money will be in your bank account in February." From what I've seen in this community and my own experience, first payments typically take 3-5 weeks after the approval notice, regardless of what date is mentioned in the letter. The SSA has to update their payment systems, verify your direct deposit information, and process everything through Treasury - it's not instantaneous. The "on or around the 3rd" language in your letter is referring to your ongoing monthly payment schedule once everything is set up and running smoothly. So while your first payment might be delayed, your subsequent payments should arrive much more predictably around that date. Since your disability onset was 8 months ago, you've definitely completed the 5-month waiting period, so you should be eligible for backpay covering roughly 3 months. This often comes as a separate deposit and might arrive before, after, or with your regular payment. I know the waiting is torture after already waiting so long, but the approval really was the hardest part. The money is definitely coming - just give it a few more weeks for the administrative machinery to catch up!

Congratulations on your approval! I know exactly how you're feeling right now - that combination of shock, excitement, and impatience is so real after going through such a grueling process. Unfortunately, based on my experience and what I've seen from countless others here, your first payment almost definitely won't arrive tomorrow. When your letter says "benefits begin February 2025," that's your official entitlement date - meaning that's when SSA considers you eligible to start receiving payments. But the actual processing and deposit typically takes an additional 2-4 weeks after approval. I got my approval letter last summer saying payments would start "on the 3rd" but didn't see my first deposit until almost a month later. The SSA has to update their payment systems, verify banking information, and process everything through Treasury - it's not an instant switch that gets flipped. Since you mentioned your disability onset was 8 months ago, you should definitely be past the 5-month waiting period, which means you're likely looking at around 3 months of backpay. This usually comes as a separate deposit with no predictable timing relative to your regular monthly payments. I'd recommend checking your MySocialSecurity account regularly for payment updates and trying to be patient for at least another 3-4 weeks before getting concerned. The approval really was the hardest mountain to climb - everything else is just administrative processing. The money is absolutely coming!