Hourly work limits for self-employed under FRA while collecting Social Security?
I recently saw someone mention that self-employed people have 'hours worked limits' when under FRA and collecting Social Security benefits - not just the earnings test ($23,400 for 2025). I'm turning 63 next month and will get my first SS retirement check in April, but I've been thinking about starting a small handmade furniture business since I can't find a decent part-time job in my area. I know about the earnings limit, but what are these hour restrictions? Do I need to track my hours? Is there a maximum I can work before they start deducting from my benefits even if I stay under the earnings limit? The SSA website seems vague about this for self-employment specifically. Any insight would be appreciated!
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Chad Winthrope
Your right to be confused! SS rules for self employed are way more complicated than for regular employees. When self employed, the SSA looks at TWO things: 1) your earnings AND 2) how much you "materially participate" in the business. Even if you make under $23,400, if you work a lot of hours they can still say your not "retired" and reduce benefits. Its totally unfair.
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Ellie Lopez
•Oh great, that's what I was afraid of. Do you know how many hours are considered "too many"? Is there a specific number I need to stay under?
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Paige Cantoni
This is a common misunderstanding. For self-employed individuals collecting benefits before FRA, Social Security applies what's called the "material participation test" alongside the earnings test. While there isn't a specific hourly limit, SSA evaluates whether you're performing "significant services" in your business. They consider: 1. How many hours you work (generally, working more than 45 hours monthly is considered substantial) 2. The nature of your services (managerial vs. non-managerial) 3. Your comparison to other workers in similar businesses Even if your net earnings stay below the annual exempt amount ($23,400 in 2025), providing significant services in a business could trigger benefit reductions. You should track your hours and be prepared to document your level of involvement if questioned.
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Ellie Lopez
•Thank you! This is exactly what I needed to know. So basically I should aim to keep it under 45 hours per month (about 10-11 hours per week). I can definitely work with that for my small furniture projects.
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Kylo Ren
Just adding to what others have said - the 45 hour monthly guideline is important, but there's a secondary threshold too. If you work between 15-45 hours monthly in a highly skilled occupation (which custom furniture making would likely qualify as), that could also be considered "significant services." Also worth noting that how you structure your business matters. If you create an LLC with appropriate documentation showing limited hours/involvement, that can help establish boundaries. Keep detailed records of your work hours, income sources, and business expenses. The SSA can request this documentation if they question your benefit eligibility.
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Nina Fitzgerald
•is this different then regular retirement? my husband works at walmart part time and they only care about the $$ amount not his hours
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Kylo Ren
•You're absolutely correct! For W-2 employees (like your husband at Walmart), only the earnings test applies - they just look at the dollar amount ($23,400 in 2025). They don't care about hours worked. It's only self-employed individuals who face both the earnings test AND the material participation evaluation. The SSA scrutinizes self-employment more because there's greater opportunity to manipulate income reporting.
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Jason Brewer
When I started collecting at 62 (I'm 64 now), I kept my woodworking business but reduced to just 10-12 hours a week and careful with income. Never had any problems with SS. Just keep good records of your time!!!
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Ellie Lopez
•That's encouraging to hear! Woodworking is exactly what I'll be doing too. Did you have to report your hours to Social Security or just keep records in case they asked?
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Jason Brewer
•Just kept a simple log in case they ever asked. They never did tbh. But better safe then sorry!
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Kiara Fisherman
This is one of the most frustrating aspects of SS benefits! I can't tell you how many clients I've had who were caught off guard by this. The material participation standards basically mean the SSA can subjectively decide if you're "really retired" even if you're under the earnings limit. If you're wanting to start a small business while collecting early SS benefits, I'd recommend: 1. Keep meticulous records of hours worked (daily log) 2. Stay under 15 hours/month if your work is skilled (which furniture making would be) 3. If possible, structure the business to separate ownership from labor 4. Document everything in case of a review And be prepared that they might still question your benefits if your business appears to require significant time investment, even with limited income.
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Ellie Lopez
•This is really helpful, but now I'm wondering if it's even worth starting the business. I was hoping to work maybe 20 hours a week, but that would put me well over both thresholds you mentioned. Is there any flexibility at all with these hour limits?
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Kiara Fisherman
•Unfortunately, there's not much flexibility - that's why many self-employed individuals wait until FRA to start benefits. At FRA, these hour restrictions completely disappear, and only the higher earnings limit applies (which also disappears after you reach FRA). If you want to work 20 hours weekly now, you have three options: 1. Delay starting SS until your FRA 2. Accept that you might lose some benefits due to exceeding the material participation threshold 3. Structure your business carefully with documented limited involvement (perhaps with a partner or family member handling some aspects) Option 3 requires careful planning with both a financial advisor and possibly an attorney to ensure compliance.
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Chad Winthrope
The whole system is rigged against small business owners, i swear. My brother in law tried doing consulting work after taking early retirement and SS came after him for "overpayments" even though he was under the earnings limit!!! They said he worked too many hours for his type of business. Total BS.
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Liam Cortez
•I had the exact same issue! Spent 45 minutes on hold with SSA trying to get clarity on this, only to be disconnected. Called back, waited another hour, got someone who couldn't answer my questions. It's almost impossible to get clear guidance directly from SSA on these self-employment rules. I finally used Claimyr (claimyr.com) to get through to an actual knowledgeable person at SSA. Their service connected me with an agent in about 10 minutes instead of hours of hold time. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed that for skilled self-employment, they consider 15-45 monthly hours as potentially "substantial" depending on the nature of the work. They suggested documenting everything and possibly filing for a pre-determination review if uncertain.
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Ellie Lopez
•Thanks for mentioning this service. I've been trying to call SSA for three days with no luck - either disconnected or wait times over 2 hours. I'll check it out because I really need to speak with someone who can give me a definitive answer for my specific situation.
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Paige Cantoni
One more important point worth mentioning - the SSA's evaluation of self-employment hours is typically only triggered during a Continuing Disability Review (CDR), benefit application process, or if your income reporting raises flags. Many self-employed beneficiaries never face scrutiny if their reported income remains reasonable and consistent with their declared business activity. If your furniture making business generates income that appears appropriate for limited part-time work (and you're documenting your hours), you may not encounter issues. The key is ensuring your reported income, business tax filings, and actual activity all tell a consistent story of part-time, limited involvement that aligns with someone receiving retirement benefits.
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Ellie Lopez
•That's a relief to hear. I'm only planning to make 5-6 custom pieces per year, which should keep both my hours and income well within reasonable limits. I'll make sure to keep detailed records of everything to maintain that consistency you mentioned.
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Nina Fitzgerald
maybe u can just not tell them about ur business?? my cousin has a small etsy shop and doesnt report it
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Kylo Ren
•This approach creates significant risks. Self-employment income must be reported to both the IRS and Social Security. Not reporting income is tax evasion and benefit fraud, which can result in: 1. Repayment of all incorrectly paid benefits 2. Monetary penalties 3. Loss of future benefits 4. Potential criminal charges in serious cases The IRS and SSA share information, so unreported business income is likely to be flagged eventually, especially if the business has any online presence or accepts non-cash payments. The penalties for intentional non-reporting far outweigh any short-term benefit.
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Nina Fitzgerald
•oh i didnt know they shared info! thx for telling me ill warn my cousin
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Ellie Lopez
Thanks everyone for the helpful responses. I think I've got a much clearer picture now. I'll start my business but keep it small - under 15 hours/month since it's skilled work, careful income tracking, and detailed hour logs. I'll also talk to a financial advisor about the best way to structure things. Really appreciate all the advice!
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Kiara Fisherman
•That sounds like a prudent approach. If you find the 15-hour limitation too restrictive as your business develops, you can always reassess whether continuing early benefits makes sense compared to growing your business more significantly. Remember that delaying benefits increases your eventual payment amount by approximately 8% per year between 62 and FRA, which is something to factor into your long-term planning.
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