SS retirement benefits and pre-FRA earnings limit confusion - will I still get anything?

The earnings test is often misunderstood. For 2025, the limit for those under FRA is $22,320 per year (projected). At $7,500/month, you'll earn $90,000 annually, which is $67,680 over the limit. So SSA will withhold $33,840 in benefits ($1 for every $2 over). Since your annual benefit would be $30,000 ($2,500 × 12), they'll withhold ALL your benefits and you'd still owe the difference. You won't receive any monthly payments until you reach FRA or reduce your work income significantly.

Oh no! I had no idea they'd withhold everything. So there's no point in applying until I either cut back my hours or reach full retirement age? Would they just send me a bill for the remaining amount I owe them?

I had the same question last year when I applied early. It doesn't work on a monthly basis like you're thinking. SSA looks at the ANNUAL earnings and withholds FULL monthly payments until the withholding amount is satisfied. So you wouldn't get $1,250/month - you'd get $0 for most months and maybe a partial payment in one month. It's not a simple reduction to each check.

Exactly right. My wife dealt with this last year. If your annual earnings are high enough, they just withhold ALL your payments. It's not a monthly percentage reduction thing like many people think.

I'm starting to think I made a mistake even considering early filing if I'm still working. Would it be better to just wait until my Full Retirement Age (66 and 8 months) when there's no more earnings limit?

In your situation, I'd definitely wait until FRA since you'll get ZERO benefit while still working at that income level. Just keep in mind that any benefits withheld before FRA do result in a recalculation at FRA to give you credit for those months, but the early filing reduction is still permanent. At your income level, there's really no advantage to filing before FRA unless you plan to significantly reduce your work hours.

This earnings limit is SO CONFUSING!!!!! I've been dealing with the same issue and nobody at SS ever explains it clearly. When I called, I waited TWO HOURS only to get disconnected. TWICE!!! The website makes it sound like they just reduce your benefit a little bit but they actually take ALL OF IT if you earn too much!

Try using Claimyr to get through to SSA faster (claimyr.com). I was struggling with the same issue last month and was getting nowhere with the regular SSA number. The service connected me to an agent in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. The agent I spoke with clearly explained how the earnings test would impact my specific situation, which was super helpful for planning.

my brother thought the same thing but they withheld most of his checks. i think he got like 2 payments the whole year when he was 64 working part time. but after FRA they adjusted his benefit amount upward to account for the months they didnt pay him

That's good to know they at least adjust it later. Did your brother say if it was worth applying early? I'm wondering if I should just wait until FRA now.

To answer your follow-up question - no, they won't send you a bill. If your earnings are high enough that they withhold all benefits PLUS you'd owe more, they simply don't pay you anything and don't collect the difference. But I strongly recommend speaking directly with SSA about your specific situation before making any decisions. The earnings limit rules are complex and your individual circumstances matter.

Thank you for the clarification. I'll definitely contact SSA directly. I had no idea the rules worked this way - the

My advice - if you're going to keep earning $7,500/month, don't bother applying until FRA. I made that mistake. Filed at 63, kept working at my job, and got ZERO payments the whole year. Just pointless paperwork. And the worst part was dealing with SSA's awful phone system trying to understand all this.

This is exactly right. And one more thing - if you DO apply early and they withhold all benefits, remember the earnings test only applies to EARNED income (wages, self-employment). Unearned income like investments, pensions, etc. doesn't count toward the limit.

AND ANOTHER THING!! When they do that recalculation at FRA to adjust for months they withheld, it NEVER seems to work out in your favor. My husband is STILL fighting with them about his adjustment 2 years later!!! The whole system is BROKEN!!!

The adjustment actually can be significant depending on how many months were withheld. For example, if you filed at 63 (36 months early = 20% reduction) but had 24 months of benefits completely withheld due to earnings, at FRA they recalculate as if you filed 12 months early (6.67% reduction). The difference between 20% and 6.67% reduction can be substantial over your lifetime.

This has been really eye-opening. I think I need to completely rethink my retirement strategy. If I keep working at this level, it sounds like there's absolutely no benefit to filing before FRA. I wonder if I should even consider waiting until 70 for the delayed retirement credits since I'm still earning good money? This is way more complicated than I expected.

If you can afford to wait until 70, that's often the optimal strategy for someone still working full-time. Your benefit increases by 8% per year beyond FRA up to age 70. Plus, continuing to work might increase your AIME (Average Indexed Monthly Earnings) if these are high-earning years for you, potentially increasing your benefit even further. But this is very specific to your individual situation - definitely worth consulting with a financial advisor who specializes in Social Security planning.