Do SS retirement benefits withheld due to earnings test get added back after FRA?

Yes, your neighbor is correct! This is called the Retirement Earnings Test (RET) and the adjustment at FRA. Here's how it works: 1. Before FRA: If you earn above the annual limit ($22,320 in 2025), SSA withholds $1 in benefits for every $2 you earn above that limit. 2. At FRA: SSA recalculates your benefit amount. They add back the months when benefits were withheld and adjust your monthly amount upward. This is called the "adjustment of the reduction factor." For example, if you lose 12 months of benefits due to earnings, when you reach FRA, your benefit will be recalculated as if you had started receiving benefits 12 months later than you actually did. Here's an official link that explains it: https://www.ssa.gov/benefits/retirement/planner/whileworking.html

wait so does this mean you can double dip?? take SS early AND get the higher amount later??? that sounds too good to be true my financial advisor never mentioned this to me!! i already waited til 66 to claim... did i mess up?

This is one of the most confusing parts of Social Security! I went through exactly this situation. Started at 62, kept working, and had some benefits withheld. When I hit my FRA last year, my benefit DID increase, but I had to call them twice to make sure they processed the adjustment correctly. One thing nobody mentioned - the adjustment doesn't happen automatically right at FRA. In my case it took about 2-3 months after my 66th birthday (my FRA) for them to process it. And they didn't give me any notification - I just noticed my deposit amount increased. Be prepared to follow up with them if you don't see the adjustment a few months after your FRA.

My dad had this happen. He took SS at 63 but kept working full time so they took back most of his SS checks. When he turned 66 (his FRA) his monthly check went up by like $340/month or something. BUT he told me he wished he had just waited to start at 66 anyway because the math worked out better overall. Just something to think about.

I work for a financial advisor who specializes in Social Security strategies, and this question comes up all the time. The SSA does recalculate your benefit at FRA to credit you for months when benefits were withheld due to earnings. However, be aware that this doesn't completely eliminate the reduction for claiming early. You're still filing at 63, which means your base benefit is reduced by approximately 25% compared to filing at your FRA of 67. The adjustment only gives you credit for months when your check was completely withheld. With your planned $30,000 income, you'll be about $7,680 over the 2025 limit, meaning approximately $3,840 in benefits withheld per year. Depending on your monthly benefit amount, that might mean 2-3 months of completely withheld checks each year.

I've been trying to call SS for WEEKS to ask this exact question!!! Always busy signal or 3+ hour wait times. So frustrating!!!!

There's a lot of misinformation floating around here. The adjustment at FRA is NOT the same as getting the same benefit as waiting until FRA to file. It ONLY applies to completely withheld monthly benefits. Let me break it down with an example: 1. You file at 63 and your monthly benefit is $1,800 (reduced from $2,400 at FRA) 2. You work and earn enough that 4 months of benefits per year are completely withheld 3. By the time you reach FRA at 67, you've had 16 months of benefits withheld total 4. At FRA, SSA recalculates as if you filed 16 months later than you did (at 64 years and 4 months instead of 63) 5. Your new monthly benefit would be higher than $1,800 but still less than $2,400 The people who benefit most from this rule are those who have benefits completely withheld due to high earnings.

One more important point: the earnings test only applies to wages and self-employment income. If you have investment income, rental income, pension payments, or distributions from retirement accounts, those don't count toward the earnings limit. So some people strategically shift their income sources to stay under the limit.