Are Social Security earnings limits applied to book royalties for new retirees?

Congrats on your book! This is a really good question. For Social Security purposes, royalties are generally treated differently depending on whether you were actively involved in creating the work. Since you wrote the book yourself, the royalties would be considered earned income and count toward your earnings limit until you reach your Full Retirement Age. If you had inherited royalty rights from someone else, they would be treated as unearned income. Make sure you track those quarterly payments carefully so you can estimate if you'll exceed the annual limit.

my cousin had almost the same situation when he retired! he published a cookbook and had to pay back some ss money because the royalties pushed him over the limit. he was so mad about it lol

The previous advice is correct. According to SSA rules, royalties from work you personally created are considered earned income for the earnings test. This is because they're treated similarly to self-employment income. The timing of when you did the work doesn't matter - it's when you receive the payment. A few important things to note: 1. You only need to worry about the earnings limit until you reach your Full Retirement Age (FRA) 2. In the year you reach FRA, the limit is much higher ($59,520 in 2025) and only counts earnings before the month you reach FRA 3. After you reach FRA, there is no earnings limit If you expect substantial royalties, you might want to calculate whether it makes more financial sense to delay claiming Social Security until your FRA to avoid the reduction.

ive been trying to call social security for THREE DAYS about my own retirement questions!!! keep getting disconnected or wait times of 2+ hours... so frustrating!!! good luck getting through to an actual person lol

congrats on publishing your book! that's a huge accomplishment! what kind of mystery novel is it? i love reading those!

Just to add some important details to what others have said: the earnings test is pretty strict in how it's applied. For every $2 you earn above the annual limit ($22,320 in 2025), SSA will withhold $1 in benefits. So if your royalties ended up being substantial, you could theoretically have some months with no SS benefits at all. However! This isn't money permanently lost. Once you reach FRA, SSA will recalculate your benefit amount to credit you for months when benefits were withheld. So you'll get a higher monthly payment going forward to make up for it. One approach some people take is to estimate their earnings for the year and voluntarily suspend benefits for certain months if they know they'll exceed the limit. This can prevent overpayment situations that require paying money back later.

wait i'm confused... do ALL royalties count as earned income? what if you get like $50 a month? surely they dont care about small amounts right?

Technically incorrect information being shared here. Royalties CAN be considered passive unearned income in some cases even if you created the work! It depends on if you're in the business of creating such works and if ongoing effort is required. You should DEFINITELY talk directly with SSA about your specific situation or consult with an accountant who specializes in royalty income. Don't just assume it counts toward the limit.

Thank you all for the helpful responses! I'll definitely call SSA to get an official ruling on my specific situation. Since this is my first book and I'm not established as a professional author (yet!), maybe there's a chance they'll view it differently. I'm thinking I'll go ahead and claim benefits as planned but set aside some money from each royalty payment just in case I need to repay anything. Seems like the safest approach until I know more about how well the book will sell. Thanks again for all the insights - this community is so helpful!

That sounds like a smart approach! Setting aside money from royalty payments is definitely wise - I've seen too many people get caught off guard by SSA overpayments. One thing to keep in mind is that you'll want to report your earnings accurately on your annual earnings report to SSA. Even if the amounts are small at first, it's better to be transparent from the start. Also, since you mentioned this might be the first of a series, you might want to think about the long-term implications if your books do well. Some authors find it beneficial to establish a business entity for their writing income, which can provide more flexibility in managing earnings and taxes. Good luck with your book launch - cozy mysteries are so popular right now!

Just wanted to chime in as someone who went through a similar situation! I'm a retired art teacher who started selling paintings after retirement. SSA initially treated my art sales as earned income since I was the one creating the work, even though I painted them after retiring. The key thing I learned is that SSA looks at whether you're "materially participating" in generating the income. Since you wrote the book yourself, they'll likely consider the royalties as earned income. What helped me was keeping detailed records of when I received payments and immediately setting aside about 30% for potential SSA adjustments and taxes. Also, don't forget that royalties might be subject to self-employment tax too if they exceed $400 annually! The earnings test can be frustrating, but as others mentioned, any withheld benefits get credited back to you later with a higher monthly payment. Best of luck with your mystery novel - sounds like a great retirement project!

This thread has been incredibly informative! As someone approaching retirement myself, I had no idea about the complexities of royalty income and Social Security benefits. The distinction between earned and unearned income based on who created the work is something I never would have thought about. It's also reassuring to hear that withheld benefits eventually get credited back through higher monthly payments after reaching FRA. For anyone else following this discussion, it seems like the key takeaways are: 1) royalties from your own creative work generally count as earned income, 2) keeping detailed records is crucial, 3) setting aside money for potential adjustments is wise, and 4) calling SSA directly for your specific situation is always the safest bet. Thanks to everyone who shared their experiences - this kind of real-world knowledge is invaluable for navigating retirement planning!

What a fantastic discussion! As someone who works in publishing (literary agent), I wanted to add a perspective that might be helpful. The timing and structure of royalty payments can vary significantly depending on your publishing contract. Traditional publishers typically pay royalties semi-annually or quarterly, and there's usually an "earn-out" period where you need to recoup your advance before seeing additional payments. Self-published authors have more control over timing but also more complexity in tracking income. One thing to consider: if you have any control over the timing of royalty payments (more common with self-publishing), you might be able to work with your publisher or distributor to spread payments across tax years to help manage the SSA earnings limits. Also, keep in mind that international royalties can add another layer of complexity to your tax and SSA reporting. Your cozy mystery sounds delightful - the market for that genre is really strong right now! Best of luck with both your book launch and navigating the Social Security maze.

This has been such a comprehensive and helpful discussion! I'm also approaching retirement (planning to claim at 62) and had been wondering about similar issues with my freelance consulting income. The distinction between earned vs. unearned income based on your personal involvement in creating the work really clarifies things for me. What strikes me most is how proactive everyone recommends being with SSA - calling early to discuss your specific situation rather than trying to guess how they'll interpret your income. The advice about setting aside 30% of any irregular income for potential SSA adjustments and taxes is something I'm definitely going to implement. It's also reassuring to know that any withheld benefits aren't lost forever but get credited back through higher payments after FRA. Natasha, your mystery novel project sounds wonderful - what an exciting way to start retirement! Thanks to everyone who shared their real-world experiences, especially those who've navigated similar situations with creative income.

This entire discussion has been absolutely invaluable! As a soon-to-be retiree myself (planning to claim at 63), I had no idea that royalty income could be such a complex issue with Social Security benefits. The key insights I'm taking away are: the importance of being proactive with SSA early on, setting aside about 30% of any irregular income for potential adjustments, and understanding that withheld benefits aren't lost forever but get credited back after FRA. It's also fascinating to learn from the publishing industry perspective about how payment structures can vary so much. Natasha, your cozy mystery sounds delightful - I hope it does wonderfully! And thank you to everyone who shared their real-world experiences, especially those who've navigated similar creative income situations. This is exactly the kind of practical, community-driven advice that makes such a difference when planning for retirement. Best of luck to everyone working through these complex benefit calculations!