What an incredibly informative discussion! I'm 61 and have been agonizing over the filing decision for months. Reading through all these real experiences and detailed explanations has been more helpful than anything I've found in official SSA materials. The key insight for me is understanding that filing early while working isn't necessarily the "bad" decision I thought it was - especially with the annual recalculations for higher earnings AND the reduction factor adjustment at FRA for withheld benefits. I'm in a similar boat to many here - earning more now than earlier in my career and planning to work at least a few more years. The idea that I could start receiving some benefits now (even reduced), have them potentially increase each year due to my current higher earnings, AND get credit back at 67 for any months where benefits were withheld due to the earnings test makes early filing seem much more attractive. Thanks to everyone who shared their personal experiences - it's exactly this kind of real-world insight that helps cut through the complexity of Social Security planning!

This has been such an educational thread! I'm 63 and actually filed for early benefits last year while still working part-time. I can confirm what several people have mentioned - I did receive a notice from SSA in December showing my benefit increased by $31/month due to my 2023 earnings replacing a lower year from the 1990s. What I found particularly helpful was setting up automatic text alerts through my my Social Security account so I get notified whenever there are changes to my benefit amount or when they process the annual earnings review. One tip for those still deciding: I ended up calling SSA multiple times to run different scenarios before filing, and each representative gave me slightly different information about the earnings test calculations. I'd recommend getting any important details in writing if possible, or at least taking detailed notes with the rep's name and date. The peace of mind of having some income coming in, even if reduced, has been worth it for me personally - especially knowing it can still increase over time!

One more important thing to consider: while benefits are reduced if you earn over the limit before FRA, you actually get those reduced benefits back later. SSA recalculates your benefit amount when you reach FRA to account for months when benefits were withheld. So you're not permanently losing that money - it's more like a delay in receiving it. This is called the Adjustment to the Reduction Factor (ARF). The information in section 202(x) of the Social Security Handbook explains this recalculation. Your monthly benefit will increase starting at FRA to account for those months when you received reduced or no benefits due to excess earnings.

Just wanted to add from my own experience - make sure you understand the timing of when SSA actually processes these changes. When I retired mid-year, it took them several months to adjust my benefits for the monthly earnings test. I had to call multiple times to get it sorted out, and they had to do retroactive adjustments. The system isn't always quick to recognize when you've actually stopped working, so keep detailed records of your last day of work and be prepared to provide documentation if needed. Also, if you're planning to do any consulting or part-time work after you "retire," make sure you understand how that income gets counted too!

anyone know if IRA distributions count towards the earnings limit? i might retire next year too and was gonna use some of my IRA money

Just wanted to add one more important detail that I learned the hard way - when you do apply for Social Security, make sure to clearly indicate on your application that you're retiring mid-year and will only be earning self-employment income after your benefit start date. There's a specific section where you can explain your work situation. I'd also recommend keeping detailed records of your last day of W-2 employment and when you officially "retire" from that job, because SSA may ask for documentation. The clearer you are upfront about your earnings timeline, the less likely you'll have issues later. Also consider doing a trial work period calculation with SSA before you start benefits - they can walk you through exactly how the monthly earnings test will apply to your specific situation.

One thing to remember is that the Medicare premium is deducted from your gross benefit amount before tax withholding is calculated, but both the full benefit amount AND the Medicare premium are reported on your SSA-1099 at the end of the year. This can be confusing when reconciling your tax documents. The Medicare premium is considered a medical expense that you've paid, even though you never actually received that money in your bank account.

This is such an important question that many new SS recipients don't think about! I went through this same confusion when I started receiving benefits. The key thing to understand is the order of operations: SS benefit → Medicare premium deducted → tax withholding calculated on remaining amount → final deposit to your account. So if you're planning for 12% withholding, make sure you're calculating that 12% on your net benefit after Medicare, not your gross benefit. Also recommend keeping track of these calculations month to month since Medicare premiums can change annually. It really does make a meaningful difference in your actual take-home amount!

I wanted to add something that hasn't been mentioned yet - if you're planning to do any major home improvements or repairs before listing the house, make sure you understand the difference between improvements (which add to your cost basis) and repairs (which generally don't). Things like a new roof, windows, HVAC system, or adding a deck are improvements that reduce your taxable gain. But routine maintenance like painting, fixing a leaky faucet, or replacing broken tiles are just repairs and don't count toward basis. The IRS is pretty specific about this distinction. Also, if you're doing any work specifically to prepare the house for sale (like staging, minor cosmetic updates, etc.), keep those receipts separate - some of those might be deductible as selling expenses rather than basis additions, which could also help reduce your taxable gain. Every dollar counts when you're looking at a $125k taxable gain! Your tax preparer can help you categorize everything properly when you file.

One strategy I haven't seen discussed yet is considering a Qualified Opportunity Zone (QOZ) investment if you're open to it. You can defer and potentially reduce your capital gains tax by investing the gain (or portion of it) into a qualified opportunity zone fund within 180 days of the sale. While this ties up your money for several years to get the full tax benefits, it could be worth exploring if you don't need immediate access to all the proceeds and want to minimize the Medicare IRMAA impact. The tax benefits can be substantial - you can defer the original gain until 2026 (or when you sell the QOZ investment), and if you hold the QOZ investment for 10+ years, any appreciation in that investment is tax-free. Obviously this is a more complex investment strategy with risks, but for someone with a $125k taxable gain who's concerned about tax implications, it might be worth discussing with a financial advisor who understands opportunity zones. Just another tool in the toolbox for managing that income spike!