Self-employed and confused about SS earnings limit - will I lose entire checks if I exceed monthly earnings?

The monthly earnings test only applies in the first year you receive benefits. After that, only the annual limit ($23,400 for 2025) matters. For any month in 2025 that you earn over $1,950, you would not receive a benefit for that month. Starting in 2026, they just look at your annual total. For self-employed people, SSA looks at your net earnings (after business expenses) but also considers how many hours you work in your business. If you work more than 45 hours a month, they might count that as exceeding the limit even if your net profit is low. You don't have to report monthly, but you should give SSA an estimate of your expected earnings for the year when you apply. Then at tax time, they'll compare your actual earnings on your tax return with what you estimated and make adjustments if needed.

My sister went thru this last yr... SSA doesnt care about monthly earnings after the 1st yr. But Idont think they look at $$ b4 you start collecting. but im not 100% sure on that.

I've been dealing with this same thing for the past year! The earnings test is THE WORST for self-employed people with irregular income. I started SS in 2024 at 63 and made a mess of things. In my experience - yes, they absolutely will withhold your ENTIRE payment for any month you go over the limit in that first calendar year. I made $2,200 in one month (just $250 over!!) and lost my whole $1,875 benefit check. Totally unfair system. After your first year, they switch to the annual test. I'd recommend keeping your income as low as possible in 2025, and then in 2026 you can earn more as long as you stay under the annual limit. And SSA does NOT make this easy to understand!!!!!

I recently figured out how to actually get through to a real SSA agent who explained all this to me. Try Claimyr.com - it got me through to a Social Security rep in about 10 minutes when I'd been struggling for days. They have a video that shows how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with confirmed that only work income (wages or self-employment net profit) counts toward the earnings limit. And they specifically told me that in the first year, they do enforce it month-by-month, but after that it's annual. They were actually really helpful once I could get someone on the phone.

my neighbor got SCREWED by this rule when he went back to work for 3 months. SSA made him pay back thousands!!! they dont tell people this stuff when u sign up

To answer the question about dividend income - no, investment income like dividends, interest, capital gains, rental income, etc. does NOT count toward the earnings limit. Only wages from a job or net earnings from self-employment count. Regarding self-employment, the Social Security Administration considers both your net earnings AND your activity in the business. So even in months where your net profit is low, if you worked substantially in your business (45+ hours/month), they might still count that as a month where you exceeded the limit. You should keep detailed records of both your income AND hours worked each month during that first year. After that, it switches to the annual test where only your total yearly earnings matter, not the month-by-month amount.

I'd like to add one important clarification about the earnings limit: when SSA withholds benefits because you exceed the earnings limit, you're not permanently losing that money. They'll recalculate your benefit amount when you reach full retirement age to give you credit for those months when benefits were withheld. For example, if you claimed at 64 but had 8 months of benefits withheld due to excess earnings before reaching your FRA, when you hit FRA, they'll adjust your benefit amount as if you had claimed 8 months later than you actually did. This means your permanent benefit amount will be higher than if you hadn't had any benefits withheld. This is called the Adjustment of the Reduction Factor (ARF), and it's SSA's way of making sure you're not penalized twice for working - once by having benefits withheld and again by taking a permanently reduced benefit.

Will there be a problem if I estimate my earnings wrong? I'm in the same boat as you (self-employed) and started benefits early this year. My income is all over the place and I'm TERRIFIED I'll suddenly get a huge bill from Social Security saying I owe them thousands of dollars! Does anyone know how strict they are about this??