How does Social Security earnings limit work if retiring before FRA this year?
I'm planning to claim Social Security retirement at age 66 and 2 months this September (my FRA is 66 and 10 months). I'm confused about the annual earnings limit. If I've already earned about $49,000 from January through September before I start collecting, does that count toward the $23,400 earnings limit? Or does the earnings limit only apply to money I make AFTER I start receiving Social Security benefits? I don't want to get hit with any unexpected reductions if I've misunderstood how this works.
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Connor O'Reilly
Good question! The annual earnings limit only applies to earnings you make in months AFTER you start receiving Social Security retirement benefits. So if you claim in September, only your earnings from September through December count toward the $23,400 limit. Your January-August earnings won't affect your benefits at all. This is because Social Security uses what's called a 'monthly earnings test' in your first year of retirement.
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Zainab Yusuf
•Thank you! That's a huge relief. So if I earn another $7,000 from September-December after I start claiming, I'd still be under the $23,400 limit and wouldn't lose any benefits?
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Yara Khoury
I was in a similar situation last year. I retired at 63 in July 2024 when my FRA was 66 and 8 months. I had already earned about $55,000 before claiming, but those earnings didn't count toward my limit. Only what I made from August-December counted. The SSA rep explained they divide the annual limit by 12 for the first year, so you only need to stay under the monthly amount ($1,950) for each month you're receiving benefits. Hope that helps!
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Zainab Yusuf
•That's super helpful - so they'd basically look at $1,950 per month for Sept-Dec in my case. Did they ask you to provide proof of when you stopped working or reduced hours?
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Yara Khoury
•Yes, they'll look at each month separately in your first year. In my case, I actually picked up some part-time consulting after claiming, and they just needed me to report my estimated earnings. They didn't ask for proof right away, but I think they can verify through tax records later. I reported my estimated earnings when I applied.
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Keisha Taylor
CAREFULL!! I thought same thing last yr and got BURNED! Make SURE u tell them ur actual STOPPING work in September. If u say ur just reducing hours they mite apply annual limit to ALL income!! hapened to my brother in law. Huge mess to fix.
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StardustSeeker
The previous comments are generally correct, but I want to add a few clarifications: 1. In your first year of retirement, SSA applies a monthly earnings test rather than the annual test 2. For any month you receive benefits, you can earn up to $1,950 without penalty 3. Any month you earn over $1,950 AND receive benefits, you'll lose that month's benefit 4. Starting in 2026 (the year after you claim), they'll switch to the annual test Also, remember that once you reach your full retirement age of 66 and 10 months, there will be NO earnings limit at all - you can earn any amount without penalty.
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Zainab Yusuf
•Thank you for the detailed explanation. If I understand correctly, I should be careful not to earn more than $1,950 in any individual month from September-December. Is that right? And if I accidentally go over that in one month, I'd only lose that specific month's benefit?
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Paolo Marino
Im confused...i thought we dont have to worry about earnings limit until we ACTUALLY collect SS? Thats what it sounds like ur asking. Am I misunderstanding somethin here?
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Connor O'Reilly
•You're right - the earnings limit only matters once you start collecting Social Security. The original poster is planning to retire and start collecting in September of this year but has already earned income from January-August. They're asking whether those pre-benefit earnings count toward the annual limit.
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Amina Bah
Just went through this whole mess myself trying to reach someone at Social Security to explain this exact situation. Called for THREE WEEKS with no luck getting through. Finally found this service called Claimyr (claimyr.com) that got me connected to an agent in about 20 minutes. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. The agent confirmed what others are saying - only earnings after you start receiving benefits count toward the limit in your first year. They explained that they look at your monthly earnings after you start collecting rather than the annual total. Saved me so much stress!
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Zainab Yusuf
•Thanks for the tip! I've been trying to get through to SSA too with no luck. I'll check out that service if I can't get my questions answered through the website.
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Oliver Becker
Good luck with that earnings limit calculation! When I retired in 2023, I was so worried about it that I just stopped working completely the month before I claimed. The whole system is needlessly confusing.
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StardustSeeker
There's one more important thing to keep in mind: if you're claiming before your FRA (which you are), benefits withheld due to excess earnings aren't lost forever. When you reach full retirement age, your monthly benefit will be recalculated to credit you for those months when benefits were withheld. So even if you do exceed the limit and lose some benefits, you'll eventually get that money back in the form of a higher monthly payment starting at your FRA.
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Zainab Yusuf
•That's good to know! So basically any reductions now would increase my benefit later? Does that recalculation happen automatically or do I need to request it?
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StardustSeeker
•It happens automatically! The SSA will recalculate your benefit when you reach your full retirement age. No action needed on your part.
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Keisha Taylor
my frend said jus dont report the extra earnings n they wont know but i think thats BAD advice cuz they check ur taxes later!!
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Connor O'Reilly
•Your friend is giving you terrible advice. The SSA definitely receives tax information and will compare your reported earnings. If you fail to report earnings that exceed the limit, you could end up with an overpayment notice and have to repay benefits with potential penalties. Always report accurately!
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Zainab Yusuf
Thanks everyone for the helpful replies! To summarize what I understand now: 1. Only earnings after I start collecting in September count toward the limit 2. They'll use a monthly limit of $1,950 for Sept-Dec of this year 3. If I go over in any month, I'd lose just that month's benefit 4. Any benefits withheld would increase my payment after I reach full retirement age I think I'll call SSA to confirm everything before I apply, just to be safe.
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