Does starting Social Security in mid-year vs January affect benefits when still working? (FRA vs early retirement question)

Yes, the month you start absolutely matters - especially when you're still working. Here's what you need to understand: 1. The earnings limit for 2025 will be around $22,400 for someone under FRA (the 2024 limit is $21,240, and it increases annually). 2. If you start SS in January but continue working through June, you'll need to report your expected earnings to SSA. If you're going to exceed the annual limit, they'll withhold benefits - $1 for every $2 you earn above the limit. 3. Starting in June rather than January means you'd receive 5 fewer months of reduced benefits, so your monthly amount would be slightly higher (less total reduction). 4. When working past the earnings limit in the same year you claim, SSA applies a monthly earnings test in your first year of benefits. This means you could potentially receive benefits for months you earn under the monthly limit (about $1,870) even if your annual earnings exceed the yearly limit. You should run the numbers both ways. Also remember that any benefits withheld due to excess earnings aren't lost forever - they're returned to you in the form of a higher benefit after you reach FRA.

I went through something similar last year. The monthly earnings test in your first year of benefits is SUPER important in your situation. Basically, no matter how much you earn January-June, if you RETIRE in June, and your monthly earnings fall below the monthly limit for July-December, you can receive full benefits for those months even if you've already exceeded the annual limit in the first half of the year. BUT - and this is crucial - you need to notify SSA when you retire mid-year so they apply this monthly test instead of the annual one. Otherwise, they might just see your total earnings for the year and withhold accordingly. As for the survivor benefits question, good news: Taking reduced benefits on your own record does NOT affect your survivor benefit amount. They're completely separate calculations. When you reach FRA, you'll get the higher of either your reduced benefit or the full survivor benefit.

u probably need to call social security directly, their rules are complicated and most people on forums don't know the actual rules. sometimes they say different things to different people too. good luck

I called the Social Security office about this exact situation last month, and after being on hold for 2+ hours, they disconnected my call. Tried again the next day with the same result. Finally used this service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in about 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed what others have said - they do apply a monthly earnings test in your first year of benefits. But you MUST tell them when you retire mid-year or they won't know to apply it. Also got confirmation that taking reduced retirement benefits now won't affect survivor benefits at FRA. Definitely worth talking to SSA directly since your situation involves both early retirement and future survivor benefits.

Uggh the earnings limit is so ANNOYING! I started SS at 63 and didn't know about the limit and had to pay back almost $7,000!!! If ur still working just WAIT until FRA to apply!!! Not worth the headache!!

To address the confusion in some of these responses: 1. Yes, there IS a monthly earnings test in the first year of benefits. This is directly from SSA's website and operations manual. 2. The person who had benefits withheld despite retiring mid-year may not have properly notified SSA of their retirement. You must specifically request the monthly earnings test. 3. Regarding the original question about which month to start: Each month you delay before FRA slightly increases your benefit amount (you're taking less of a reduction). But there's also opportunity cost to consider - months of payments you miss by waiting. 4. For the specific scenario: If you'll work January-June earning above the limit, then have no earnings July-December, it might make sense to apply for benefits effective July. You'd get slightly higher monthly payments than starting in January, and you wouldn't have any benefits withheld due to excess earnings. 5. All of this applies to your own retirement benefit. As correctly noted, when you reach FRA, you can switch to the survivor benefit if it's higher, with no reduction.

i heard they also look at which days of the month you work? is that true? like if you work the first half of june but then retire mid-month?

Thank you all for the helpful information! I think I'm going to apply for benefits to start in July after I retire in June. That way I avoid having any benefits withheld due to the earnings limit, and I'll make sure to explicitly tell SSA when I retire so they apply the monthly test for the rest of the year. I really appreciate everyone sharing their experiences and knowledge. This is such a complicated system to navigate!

Just want to point out that the Earnings Limit is HIGHER if you reach your Full Retirement Age during the year! So if your FRA is in 2025 the limit is different than if your FRA is later! Look it up on ssa.gov because most people dont know this!!!

my mom just went through this whole thing last year. make sure you keep ALL your paystubs so you can prove exactly which months you earned what. social security made a mistake with her record and it took 5 months to fix because she couldn't find her january pay stub from last year.