Do 403B contributions count toward Social Security earnings limit of $23,400 for 2025?

SSA uses your gross earnings before any deductions when applying the annual earnings limit. So yes, your 403B contributions are still counted as part of your income toward that $23,400 limit for 2025. It's based on your W-2 Box 5 wages for most employees, not what actually hits your bank account after your retirement contributions. This is different from how some other programs calculate income.

Are you sure about this??? I thought retirement contributions were EXCLUDED from the SS earnings test! My friend's financial advisor told him they don't count and that's why he increased his 401k contributions after starting SS last year. Now I'm worried he's going to get a huge overpayment notice from SSA!!

I just went through this exact situation last year! Tried calling SSA for weeks and couldn't get through. I finally used a service called Claimyr (claimyr.com) that got me connected to an SSA agent in about 20 minutes instead of waiting on hold for hours. The agent confirmed that 403B/401k/457 contributions DO count toward the earnings limit - it's your gross wages before any deductions that matter. You can see how their service works in this video: https://youtu.be/Z-BRbJw3puU - definitely saved me from making a costly mistake with my part-time work hours.

yeah this is right its GROSS income that matters not net. my brother got hit with a big overpayment last year cuz he thought his 401k would help him stay under the limit

I want to add a critical point here: The earnings limit only applies to money earned in months AFTER you've filed for benefits in that calendar year. So if you file in February 2025, only your earnings from March-December count toward that $23,400 annual limit. Also, in the first year you claim benefits, SSA uses a monthly test rather than annual ($1,950/month for 2025). This sometimes helps people who work part of the year before claiming.

My sister had this EXACT same problem! The whole SSA system is RIGGED to confuse people so they end up with overpayments that they demand back!!! They deliberately make these rules complicated and then don't answer their phones when you try to get clarification. It's a TRAP designed to catch hard-working Americans who are just trying to supplement their meager SS benefits!!!

I retired as a teacher last year and had the same question. After researching this topic extensively, I created a spreadsheet to track my earnings each month to make sure I stay under the limit. Would it be helpful if I shared a template of how I track this? The monthly method mentioned above really does help in your first year.

wait a sec isnt the limit different if ur full retirement age in the same year? my uncle said something about that

I'm still confused - what about self-employment income? Does that count differently? And what about pension payments from previous employers? Sorry for the questions but this is all so complicated!

Thank you all for the great information! To summarize what I've learned: 1) My 403B contributions DO count toward the earnings limit, 2) I might benefit from the monthly limit in my first year, 3) I need to carefully track my earnings to avoid an overpayment. I'm going to call SSA to confirm all this and maybe try that Claimyr service since I haven't been able to get through on my own. Really appreciate everyone's help!

This is such a helpful thread! I'm in a similar situation - turning 62 next year and planning to work part-time while collecting SS. One thing I want to add is that if you do accidentally go over the earnings limit, SSA will withhold $1 in benefits for every $2 you earn above the limit (not dollar for dollar). So if you go over by $1,000, they'll withhold $500 in benefits. It's still not ideal, but it's not as harsh as losing the full amount. Also, any benefits they withhold aren't lost forever - they recalculate your benefit amount upward when you reach full retirement age to account for the months you didn't receive benefits due to the earnings test.

I'm also 62 and considering early retirement while working part-time! This thread has been incredibly informative. I had the same confusion about whether pre-tax retirement contributions would help me stay under the earnings limit. It's disappointing to learn they don't, but better to know now than get hit with an overpayment later. One question I have - does anyone know if the earnings limit applies to contract work or just W-2 employment? I'm considering doing some freelance consulting work in my field instead of traditional part-time employment, and I'm wondering if that changes how SSA calculates the earnings test.

I'm 61 and facing the same decision next year! This whole thread has been incredibly eye-opening. I had assumed my 401k contributions would help me stay under the limit too. One thing I'm wondering about - does anyone know if there's a way to get official written guidance from SSA about your specific situation? I've heard horror stories about phone agents giving different answers to the same question, and I'd feel more comfortable having something in writing before I make any major decisions about work hours or retirement contributions. Also, has anyone successfully appealed an overpayment decision if SSA gave you incorrect information over the phone?

I'm 60 and planning ahead for this exact situation! Thank you everyone for such detailed explanations. I want to add one more resource that might help - the SSA website has a retirement earnings test calculator (just search "earnings test calculator" on ssa.gov) where you can input your expected wages and filing month to see how it affects your benefits. It's not perfect but gives you a ballpark estimate. Also, I learned from my tax preparer that if you're doing contract work like @James Johnson mentioned, you might want to consider forming an LLC and paying yourself a reasonable salary rather than taking all profits as distributions - the salary portion would count toward the earnings test, but profit distributions typically don't (though definitely verify this with a tax professional for your specific situation). This whole thread should be bookmarked by anyone approaching early retirement!

I'm 61 and have been following this discussion closely as I prepare for early retirement next year. This thread has been incredibly valuable - thank you all for sharing your experiences and research! I wanted to add one more important detail that I learned from my financial advisor: if you're planning to work part-time after claiming early SS benefits, consider adjusting your withholding allowances on your W-4 form. Since you'll likely be in a lower tax bracket with reduced work hours, you might be over-withholding taxes from your part-time wages. This won't affect the earnings test calculation (which still uses gross wages), but it can help with your monthly cash flow. Also, don't forget that your Social Security benefits themselves might become partially taxable once you add work income to the mix. The combined income threshold is pretty low - $25,000 for single filers. It's a lot to juggle, but threads like this make it so much more manageable!

I'm 63 and went through this exact situation two years ago! Just want to emphasize something that got briefly mentioned but is super important - if you do exceed the earnings limit accidentally, don't panic. Yes, they'll withhold benefits (at that $1 for every $2 over the limit rate), but those "lost" benefits aren't really lost forever. When you reach your full retirement age, SSA recalculates your monthly benefit upward to account for all the months they withheld payments due to the earnings test. It's like getting credit for those withheld benefits later. I went over by about $3,000 my first year because I miscalculated, and they withheld $1,500 in benefits. But when I hit my FRA last year, my monthly benefit increased by about $25/month permanently to make up for those withheld payments. Still better to avoid going over in the first place, but knowing this helped me sleep better when I got that overpayment notice! Also, Carmen, if you do use that Claimyr service, ask the agent to walk through a few different scenarios with your expected wages - it really helps to hear the calculations explained step by step.

I'm 64 and just went through this process last year! One thing I haven't seen mentioned yet is that you should also be aware of how bonuses, overtime, and holiday pay factor into the earnings test. These all count as wages in the month they're paid, not when they're earned. So if you get a year-end bonus in December, that full amount counts toward your December earnings for the monthly test. This caught me off guard because I thought I was safely under the monthly limit, but a small holiday bonus pushed me over. Also, if your school district offers any end-of-year payouts for unused sick days or vacation time, those count as wages too. Since you're in education, you might want to ask HR about the timing of any potential payouts and whether you can defer them until after you reach full retirement age. The good news is that summer months when school isn't in session can help balance out higher earning months during the school year if you're not working those months.

I'm 60 and have been researching this topic extensively in preparation for early retirement. One crucial detail I want to add that hasn't been fully covered: if you're receiving benefits before your full retirement age and you have months where you exceed the MONTHLY limit ($1,950 for 2025), SSA will withhold your ENTIRE benefit for that month, not just a portion. This is different from the annual calculation where they withhold $1 for every $2 over the limit. So if you earn $2,500 in March (just $550 over the monthly limit), they'll withhold your full benefit payment for March. This monthly rule only applies in your first year of benefits and only for months after you start receiving benefits. After your first year, they switch to the annual earnings test. This is why timing your benefit start date and carefully managing your monthly earnings in that first year is so critical. I learned this from reading SSA Publication 05-10069 cover to cover - definitely recommend everyone download that official guide rather than relying solely on phone advice that can be inconsistent.

I'm 59 and planning to file at 62 next year, so this discussion has been incredibly helpful! One thing I wanted to add based on my research is about the timing of when SSA actually processes earnings reports. They typically don't catch earnings limit violations immediately - it often takes 12-18 months for them to reconcile your reported wages with what you told them when you filed. This means you might receive "overpayments" for more than a year before they catch up and start withholding benefits or demanding repayment. The silver lining is that this gives you time to set aside money if you think you might go over the limit, rather than being surprised by an immediate benefit reduction. Also, I've read that if you're close to the limit, it's better to err on the side of caution and report higher estimated earnings to SSA upfront - they'll adjust your benefits accordingly, and if you end up earning less than expected, they'll pay you the difference later. It's much easier to get money back from SSA than to deal with overpayment recovery!

I'm 58 and starting to plan for this exact scenario in a few years! This entire thread has been absolutely invaluable - thank you everyone for sharing such detailed, real-world experiences. One question I haven't seen addressed: what happens if your employer changes your pay schedule or moves your payday? For example, if they switch from monthly to bi-weekly pay, or if a payday falls on a weekend and gets moved to the previous Friday vs. the following Monday - does that affect which month the wages count toward for the monthly earnings test? I'm trying to think through all the potential timing issues since it sounds like the monthly calculation in that first year is so critical. Also, has anyone dealt with situations where their W-2 shows different wages than what they actually received due to payroll corrections or adjustments? I imagine that could create complications when SSA tries to reconcile your reported earnings against your actual W-2. This community has been so generous with sharing knowledge - I'm definitely bookmarking this thread for reference as I get closer to filing!