Exceeded 2024 Social Security earnings limit by $6,368 - how will SS claw back overpayment?
Well I'm in a pickle now! Had to file for my Social Security retirement at 64 last January (2024) due to some money troubles. My employer promised to keep my hours low enough to stay under the earnings limit, but they kept loading me up with extra shifts all year. Just got my W-2 and I'm $6,368 OVER the $23,400 earnings limit! From what I calculated, this means SS will claw back $3,184 (half the overage amount). My question is - HOW do they collect this overpayment? Will they just stop my checks completely until they recover the full amount? I've heard rumors they might just take 10% from each monthly check? Should I call them now or just wait for them to send me a letter? And does anyone know if the 2025 earnings limit will still be $23,400? Thanks for any advice. I've tried calling SSA twice but gave up after being on hold forever. Really appreciate this group!
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Emma Wilson
First, don't panic. This happens more than you'd think. When you exceed the annual earnings limit while collecting retirement benefits before your Full Retirement Age (FRA), SSA typically withholds benefits in the following year to recover the overpayment. The withholding usually works like this: They'll calculate how many full monthly benefits they need to withhold based on your monthly payment amount. For example, if your monthly benefit is $1,500 and they need to recover $3,184, they might withhold about 2 full months of benefits. They should send you a notice before they start withholding. And yes, the 2025 earnings limit will increase slightly from $23,400 (probably to around $24,000-24,500), but they haven't announced the official number yet.
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Javier Cruz
•Thanks for the helpful info! So they'll likely just withhold a couple of months completely instead of taking a percentage over time? That's going to be rough, but at least I can try to plan for it. Do you know approximately when they might send this notice?
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Malik Thomas
SSA typically handles this by withholding full monthly benefit payments until the overpayment is recovered. If your monthly benefit is $1,500, they'd withhold about 2 months of payments plus some of a third month. From my experience, they don't usually do the 10% reduction option for earnings limit overpayments (that's more common for other types of overpayments). They'll send you a notice before making any adjustments, usually in late spring after they've processed tax data from the previous year. Don't wait for them though - you can report this income change now through your mySocialSecurity account or by calling. For 2025, the earnings limit is estimated to be around $24,660, though the official number hasn't been announced yet.
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NeonNebula
•This is EXACTLY what happened to me last year!!! My daughter got me some extra work at her office and I ended up making about $5k over the limit. SSA kept my checks for March and April completely, then took half of May. Their letter came in February. The WORST PART was I couldn't get anyone on the phone to explain it clearly before it happened. I kept getting disconnected after 2+ hours on hold 😡😡😡
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Isabella Costa
I recently discovered a service called Claimyr (claimyr.com) that helped me actually get through to a real SSA agent without the crazy wait times. Saved me hours of frustration! They have a video showing how it works here: https://youtu.be/Z-BRbJw3puU I used it when I had a similar earnings issue last year and was able to talk to someone who explained exactly how my benefits would be adjusted. Made the whole situation way less stressful knowing what to expect.
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Javier Cruz
•Really? I've never heard of this service but I'm desperate to talk to someone at SSA. I'll check it out - at this point I'd try anything to avoid those endless hold times. Thanks for sharing this!
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Ravi Malhotra
my sister in law went thru this last year. they took back TWO FULL MONTHS of her checks. she was NOT happy!! but then it was done. good luck!
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Freya Christensen
•did she get any advance notice or did the check just not show up one day?? thats what worries me, no warning and then suddenly no money for bills!
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Omar Farouk
WAIT A MINUTE - are you sure about your math? If you went over by $6,368, then you made $29,768 for the year, right? But the penalty is $1 for every $2 over the limit, which gives $3,184 like you said. Just wanted to make sure I understand how this works since I'm turning 62.5 this year and thinking about filing early. Also, was your income spread evenly throughout the year or did you earn most of it in certain months? I think that matters somehow with how they calculate the payback...
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Emma Wilson
•You're right about the math. The benefit reduction is $1 for every $2 earned above the annual limit. So $6,368 ÷ 2 = $3,184 benefit reduction. Regarding monthly earnings - this is an important point. SSA has what's called a "grace year" rule. In your first year of retirement, they use a monthly earnings test instead of annual ($1,960/month for 2024). If you stay under that monthly amount in any month, you get full benefits for that month, regardless of annual total. But this only applies in your first year of receiving benefits.
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Freya Christensen
Does anyone know if this will affect his benefit amount permanently? I thought I heard somewhere that if Social Security takes back money before your full retirement age, they recalculate your benefit when you reach FRA. Is that true or am I mixing this up with something else?
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Malik Thomas
•You're actually referring to something important. Any months where SSA withholds benefits due to excess earnings are credited back to you when you reach Full Retirement Age. They recalculate your benefit amount as if you had not received benefits during those months, which can increase your monthly payment slightly. So while the withholding feels painful now, there is a small silver lining down the road. This is part of the benefit "adjustment" that happens at FRA for people who filed early and had benefits withheld due to work.
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Ravi Malhotra
my uncle told me you can ask them to spread the repayment out over 12 months instead of taking full checks but idk if thats true
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Emma Wilson
•This is partially correct. While SSA typically recovers earnings limit overpayments by withholding full benefit checks, they do have some flexibility in certain hardship situations. If having full checks withheld would cause significant financial hardship, you can request an alternative repayment arrangement when you receive your notice. However, approval for extended repayment plans is not automatic and depends on your specific financial situation. You would need to provide evidence of hardship when making the request.
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NeonNebula
The system is RIDICULOUS!!! Why do they penalize seniors for working???? I'm so sick of this stupid earnings limit! When I called about MY overpayment last year, I waited 3 HOURS and then got disconnected. Called back, another 2.5 hours - finally got someone who barely spoke English and couldn't explain ANYTHING clearly about how they calculated my payback amount. THE WORST PART is they don't even WARN you during the year when you're getting close to the limit! They could easily set up some kind of alert system but NOOOO, they'd rather catch people and take back money!!!!
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Javier Cruz
•I know! It's frustrating that there's no warning system. I kept track of my earnings but my employer kept changing my hours last minute and by December it was too late. I'm honestly dreading making those phone calls now hearing about your experience.
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Malik Thomas
One more important thing to know: if you're going to exceed the earnings limit again in 2025, you can request a "Rate Adjustment" where SSA reduces your monthly payments in advance based on your estimated earnings. This prevents a large overpayment situation. For example, if you know you'll exceed the limit by about $6,000 again, they could reduce your monthly benefit by about $250 ($3,000 ÷ 12 months) throughout the year instead of withholding full months later. This can be much easier to manage financially. You can request this by calling SSA or visiting your local office with an estimate of your expected 2025 earnings.
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Javier Cruz
•This is EXTREMELY helpful information! I definitely think I'll exceed the limit again in 2025 because my hours aren't going down anytime soon. Having smaller reductions each month would be much more manageable than losing entire checks. I'll definitely ask about this "Rate Adjustment" when I contact them. Thank you!
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