Hourly work limits for self-employed under FRA while collecting Social Security?

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?

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.

is this different then regular retirement? my husband works at walmart part time and they only care about the $$ amount not his hours

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.

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?

Just kept a simple log in case they ever asked. They never did tbh. But better safe then sorry!

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?

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.

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.

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.

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.

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.

oh i didnt know they shared info! thx for telling me ill warn my cousin

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.

Thanks for bringing up the grace year rule! That's something I hadn't considered. Since I'm starting benefits in April, I could potentially work more hours in January-March before my benefits kick in. Do you know if the monthly earnings test applies to the hour restrictions too, or is that still based on the annual evaluation? I'm wondering if I could front-load some of my furniture projects early in the year.

The grace year rule is really helpful, but unfortunately the material participation test for self-employed individuals typically looks at your overall business involvement rather than monthly snapshots. The SSA evaluates whether you're providing "significant services" to the business throughout the year, so front-loading work in January-March could still count against you if it demonstrates substantial ongoing business participation. However, if you're truly winding down employment and transitioning to retirement, documenting that January-March represents your final intensive work period before scaling back could support your case. I'd recommend consulting with SSA directly about how they'd evaluate your specific timeline and business structure.

This is brilliant advice! I never thought about differentiating between production work and administrative tasks. That could be a game-changer for staying compliant while still running a viable business. I'm definitely going to set up a similar tracking system - maybe even use different categories like "design/planning," "actual woodworking," "customer communications," and "business admin." Do you think it matters how you categorize the work, or is it more about showing that not all your hours are direct production? This could help me make better use of those 15 monthly hours by being strategic about what activities I prioritize during peak times.